Overnight Range 1.3437-1.3513      

It has been quite a week for US dollar bulls.  The greenback has made impressive gains across the G10 spectrum since last Friday’s close.  Only the Canadian dollar has managed to squeeze out a gain and that gain is tenous, at best.

Asia started the week the way it ended.  FX traders started buying US dollars vs. the majors due to fears of rising US yields, the prospect of a December interest rate hike and the risk of hostile trade policies from Trump’s administration. They soon changed their minds.

AUDUSD and NZDUSD traded lower in the early going but the moves were not sustained. USDJPY couldn’t crack above 111.18 and retreated.  The Nikkei 225 closed at 18,106.02, up 0.77%.

The US dollar was on the defensive in Europe, mostly due to short covering thanks to US Thanksgiving holiday’s this week. Some suggested that the improved tone to the Euro was because of German Chancellor Angela Merkel’s decision to seek a fourth term. That’s a bit of a stretch

Sterling traded with an offered tone until the open in New York when GPUSD rallied to 1.2405 from 1.2330, in part, because of remarks from UK Prime Minister Theresa May who promised to spend billions of pounds on science and technology and hinted at corporate tax cuts.  She said “Our modern Industrial Strategy will be ambitious for business and ambitious for Britain,” according to a Reuters article.

Oil prices rallied. Positive comments from Russia and Iran have convinced traders that Opec will announce meaningful production cuts on November 30.  WTI climbed to $46.64 from $45.49.  The softer tone to the US dollar contributed to the oil’s rise.

USDCAD extended losses from Friday.  The rise in oil prices led to a break of support at 1.3480 and further losses to 1.3437.

Oil price movements will be the key driver for the Canadian dollar.  Trains, planes and automobiles will be busier than usual as American’s take a break for Thanksgiving.  Many take the entire week off which will put a damper on trading activity.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while prices are below 1.3490 looking for a break of the November uptrend line (currently 1.3430) to extend losses to 1.3360.  A move above 1.3490 would put the focus back to 1.3580. For today, USDCAD support is at 1.3440 and 1.3390.  Resistance is at 1.3490 and 1.3540.

Today’s Range 1.3440-1.3510

Chart:  USDCAD  1 hour