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March 9, 2021

USDCAD open (6:00 am ET) 1.2606-10,  Overnight Range 1.2593-1.2684,  Close 1.2665

FX Ranges at a Glance 

Source: IFXA Ltd/RP

FX Recap and Outlook

FX markets have drifted into “risk-seeking” mode, with news the Organisation for Economic Development and Cooperation (OECD) upgraded their global growth forecast.

2021 GDP is predicted to expand by 5.6% compared to December’s guess of 4.2%, while the 2022 forecast rose 0.3% to 4.0%.

Global equity indexes moved higher (except for China), with the UK FTSE 100’s 0.76% rise leading European bourses higher.  Wall Street is poised to open in positive territory as S&P 500 are up 1.02%.  Gold prices regained the $1700.00 handle, and WTI oil prices are steady at $65.80/barrel.

EURUSD bottomed out in Asia at  1.1837, climbing steadily in Europe to reach 1.1915 in NY trading.  A retreat in 10-year Treasury yields from 1.600% to 1.526% sparked the move.  The move in Treasury yields is chalked up to position adjustment ahead of $120 billion issuance starting with the 3 year today.  German Trade data was a tad better than expected, while Eurozone Q4 GDP was mixed.  The short term EURUSD technicals are negative below 1.1950.

GBPUSD traded in a 1.3803-1.3899 range, with prices boosted by the broad US dollar retreat.  GBPUSD continues to consolidate gains following the Brexit deal, and the technicals are bullish above 1.3650.

USDJPY popped to 109.23 in Asia before plunging to 108.57 just before NY opened, with the price action mirroring the decline in 10-year US Treasury yields.   Japanese  Q4 GDP rose 2.8% q/q, below the forecast of 3.0% q/q.

AUDUSD and NZDUSD traded lower in Asia than rallied in Europe, tracking broad US dollar developments.  New Zealand Business Confidence was worse than expected while Australia’s Business Confidence reading beat forecasts.

USDCAD continues to be undermined by bearish technicals and expectations that oil prices will climb higher.  The direction continues to be determined by the prevailing US dollar sentiment against the majors.  Tomorrow’s Bank of Canada monetary policy meeting is expected to be a non-event.

The US and Canadian economic calendars are empty.

USDCAD Technicals:  The USDCAD technicals are bearish below the 1.2710-30 area.  Prices are consolidating recent losses and looking for a break below 1.2550 to continue the downtrend to 1.2450.  For today, USDCAD support is at 1.2580and 1.2550.  Resistance is at 1.2640 and 1.2690. Todays Range 1.2580-1.2640

Chart: USDCAD4 hour

Source:  Saxo Bank

FX open (6:00 am EDT) High, Low, and previous close

Source:  Saxo Bank