USDCAD Open (6:00 am) 1.3123-27 Overnight Range 1.3096-1.3146
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close, (4::00pm)Aug3, 6:00 PST
USDCAD failed to extend gains above 1.3150 overnight and has declined steadily since then but the decline stalled at 1.3080. The bounce has been shallow but WTI trading at $39.66 and an ADP number (179k) that beat the forecast (170k) has provided USDCAD with some support.
Overnight, Asia FX was quiet. USDJPY bounced from a low of 100.66 and is hovering around 101.25, AUDUSD trade sideways and NZDUSD drifted lower, in part on fears of a RBNZ rate cut next week.
European economic data was mostly as expected but with Friday’s US employment report looming, the data did not have much impact. Sterling traders took GBPUSD to 1.3372 but it has since retreated. Thursday’s Bank of England policy decision is widely expected to deliver a 25 bp. rate cut, which is fully priced in. What is not priced in is a bigger, 50 bp. rate cut which is a real possibility according to analysts at JPMorgan.
WTI oil prices remain in n intraday downtrend below $41.60. A decisive break above this level would negate the short term pressure although it will do nothing to alleviate the short term downtrend.
It is probably a mistake to read too much into the intraday moves today and yesterday. FX traders are likely adjusting positions ahead of Thursday’s Bank of England meeting and Friday’s US employment report.
USDCAD technical outlook.
The intraday USDCAD technicals are bearish while trading below 1.3140 looking for a break below 1.3080 to extend losses back to 1.3040 and then 1.3000. However, as long as USDCAD remains above 1.3000, the trend is higher an another test of 1.3250 is likely. For today, USDCAD support is at 1.3080 1.3040 and 1.3020. Resistance is at 1.3150, 1.3180 and 1.3200
Today’s Range: 1.3060-1.3140