USDCAD Overnight Range 1.2828-1.2890
USDCAD got a bit of decent economic news in the form of better than expected Manufacturing Shipments data which rose 1.0% vs. forecast of 0.6%) Unfortunately, sliding oil prices and the looming FOMC meeting trumped the news.
Overnight, FX markets shifted their pessimistic outlook for the world, evident over the past few sessions and shifted it to a more optimistic view. The US dollar retreated against the G10 with exception of CHF and JPY. AUDUSD shrugged off early weakness and recouped all of yesterday’s losses, ignoring the drop in the Consumer Confidence Index. New Zealand’s Q! Current Account improved slightly and Kiwi followed AUDUSD higher.
Sterling bounced a little on an improvement in the polls for the Remain side. The government warned that if the UK left the EU, taxes would likely increase. Traders ignored UK employment data and the Eurozone trade figures.
Oil prices recovered from their overnight low. Yesterday’s end of day, American Petroleum Institute report that US Crude stocks rose 1.52 million barrels sent WTI to $47.55/b from $48.49/b. Both Opec and the International Energy Agency predict better times for oil in the latter half of 2016.
The bar is set very low for any meaningful insight by the Committee suggesting that FX markets are vulnerable to a steep US dollar rise in the event of hawkish comments.
USDCAD technical outlook
The intraday USDCAD technicals are bullish above 1.2810 which guards the 1.2735 uptrend line from May. A decisive move above the 1.2890-1.2910 area should lead to a test of the 1.2970-1.3000 area. A move below 1.2810 would extend losses to 1.2735.
For today, USDCAD support is at 1.2835 and 1.2790 with resistance at 1.2890 and 1.2940.Today’s Range 1.2810-1.2910