USDCAD Overnight Range 1.3950-1.4121        

The Loonie has gone for a wild ride on an oil rollercoaster. WTI prices soared to $34.82 from a low of $31.74 on a mere report that Russian and Saudi Arabia’s ARAMACO may be open to discussing production cut.  That’s pretty vague and stinks of wishful thinking but regardless, oil went higher and Loonie did as well. USDCAD spent the entire European session waffling around in a 1.4050-1.4120 range but plummeted when WTI cracked above $34.00/b. It helped that the US Durable Goods report was soft and raised new doubts about an FOMC rate hike in March.

Speaking of the FOMC, media reports following yesterday’s FOMC statement all said that the Committee left the door open for a March hike which is true since they didn’t say that they wouldn’t raise rates. But that doesn’t mean it is likely. The fact that they appeared to elevate concerns over global economic and financial developments points to a rate hike later in the year.

Overnight, there wasn’t a lot of debate as to whether the Reserve Bank of New Zealand’s interest rate statement was doveish or bullish.  It was released late yesterday afternoon and stated that “further easing may be required over the coming year”. A little later, Fonterra downgraded its farmgate milk price for the 2015/16 season. NZDUSD sank but recovered during the European session

GBPUSD rallied as GDP data came in as forecast and EURUSD climbed on general US dollar weakness. The Bank of Japan interest rate statement is due today and there is a minor risk of policy action. As an aside the Japanese Economics minister resigned.

The oil priced rally was short lived.  WTI prices are currently trading at $33.75/b and USDCAD has rallied back to 1.4025. Tomorrow is month end and there is some talk that portfolio managers may need to buy US dollars at the 1600 GMT fixing time.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.4075 a level protected by former support, now resistance at 1.4040. A decisive break below 1.3950 will extend losses to major support at 1.3800.  For today, USDCAD support is at 1.4000, 1.3980 and 1.3950.  Resistance is at 1.4040 and 1.4080.

Forecast Range for the day 1.3980-1.4040

Chart USDCAD hourly