September 13, 2019

USDCAD Open (6:00 am EDT) 1.3219-23        Overnight Range 1.3210-1.3239.

The US dollar is clawing back some of its overnight losses after August US Retail Sales rose 0.4%. (forecast 0.2%) Also, the July results were revised higher.  The US Census Bureau noted “Retail trade sales were up 0.6 percent (±0.5 percent) from June 2019, and 4.6 percent (±0.7 percent) above last year.”

FX Market Snapshot

Change in Currency value vs the US dollar-   NY close to 5:45 am PDT

EURUSD retreated from its overnight peak of 1.1108 but the retreat has been shallow.  Traders continue to analyse ECB President Draghi’s closing remarks at his press conference.  He said, “The implementation of structural policies in euro area countries needs to be substantially stepped up to boost euro area productivity and growth potential, reduce structural unemployment and increase resilience.”   Some economists believe he signalled yesterday’s action was the end of monetary policy stimulus. Others think another rate come will happen before the end of the year

Sterling was the biggest gainer overnight. GBPUSD soared to 1.2475 from 1.2329 after reports that Irelands Democratic Union Party (DUP) would “shift its red lines” as part of a new Irish backstop deal. Arlene Foster, leader of the DUP, denied the story, saying “anonymous sources lead to nonsense stories.” The GBPUSD retreat following  Ms Foster’s comments was shallow, suggesting that some traders believe “where there is smoke, there is fire.”

USDJPY added to its post-ECB gains, touching 108.25 before sliding steadily to hit 107.92 in Europe.  The jump in US Treasury yields support prices,  but traders are concerned about future Fed interest rate cuts.

Asia FX markets were a tad subdued in part because China was closed for a holiday. The US/China trade spat was front and center. President Trump mumbled about an interim trade deal, although he didn’t seem to be very enthusiastic about the prospect. Nevertheless, AUDUSD saw a little support from the news but stayed within the 0.6850-0.6870 range. AUDNZD gains undermined NZDUSD, which fell to 0.6387 from 0.6407.

USDCAD rallied as oil prices fell. West Texas Intermediate (WTI) dropped 6.0% since Wednesday after Opec and IEA warned that oil supplies would outstrip demand in 2020.

USDCAD Technical View

The intraday USDCAD technicals are bullish above 1.3190, looking for a break above 1.3240 to extend gains to 1.3340. Below 1.3190 suggests additional 1.3140-1.3240 consolidation.  However, the longer term uptrend is intact while prices are above 1.3090. Today’s range 1.3190-1.3240

Chart: USDCAD 1 hour