USD/CAD never really recovered from yesterday’s very dovish sounding speech by Bank of Canada Deputy Governor, Carolyn Wilkins. She stated that “Given the destructive recession Canada experienced, measures of economic slack that focus on the labour market show greater unused capacity than broader measures do”. USDCAD traders interpreted that line to mean that another rate cut was not just on the table but on the horizon as well and USDCAD soared. At the same time, oil traders were rethinking their conclusion that oil prices were heading higher. The US Energy Institute (EIA) issue a report projecting US oil supply growth until 2020. The slide in WTI prices added fuel to USDCAD demand. Soft oil prices and negative Canadian dollar sentiment will keep USDCAD in demand today.
Overnight, Japan was closed for a holiday but that did not stop USDJPY climbing to levels not seen since the beginning of the year. AUD and Kiwi both drifted lower on softer commodity prices. In Europe, EURUSD went nowhere ahead of the EU leaders summit on Greece. A press conference occurs sometime around 2 pm EST.
USDCAD technical Outlook
The intraday USDCAD technicals are bullish while trading above 1.2590 with a break above 1.2635-40 extending gains to 1.2730. A move below 1.2570 targets 1.2530 and then 1.2480. The short term uptrend remains intact above 1.2380
Today’s Range 1.2610-1.2680