The US dollar opened in New York with minor gains against EUR, GBP, CHF and JPY, a tad softer against the Antipodean currencies and unchanged against the Loonie.  China New Year holidays put a damper on trading in Asia, while speculation ahead of President Trump’s “State of The Union” address tonight, helped to stifle European trading.

President Trump said his speech would focus on “unity” which to him means the unity between bricks, mortar and barbed wire along the Mexican border. Some are concerned that he could threaten another government shutdown while others are hoping for news of fiscal stimulus. The only thing that is certain is that the speech will be as entertaining as Sunday’s Super Bowl game.

AUD

AUDUSD took center stage in Asian. It got spanked when December Retail Sales were weaker than expected, (Actual -0.4% vs forecast -0.1%) falling from 0.7218 to 0.7192. Prices rallied to 0.7262 after the Reserve Bank of Australia (RBA) kept a tightening bias.  The RBA said: “The central scenario is for the Australian economy to grow by around 3 per cent this year and by a little less in 2020 due to slower growth in exports of resources. The growth outlook is being supported by rising business investment and higher levels of spending on public infrastructure.”

AUDUSD found resistance at 0.7262 and is trading in New York at 0.7247.

JPY

USDJPY drifted in a narrow band supported by another small rise in US Treasury yields.

EUR

In Europe, EURUSD inched lower. Eurozone data was mixed. December retail sales were -1.6% as expected while Services PMI at 51.7, beat the 50.7 prediction.  The single currency still drifted lower ahead of Trump’s speech.  GBPUSD drifted lower thanks to weak Services PMI data and rising concerns for a no-deal Brexit.  The EU doesn’t appear to have any interest in reopening Brexit discussions, and the UK doesn’t like the deal that Prime Minister May negotiated.

CAD

ISM Non-manufacturing PMI data (forecast 57.1 vs previous 58.0) is on tap in the US while Canada releases trade data. Both reports should have minimal impact on FX trading.

USDCAD rallied from 1.3085 to 1.3145 yesterday, in concert with WTI oil prices dropping from $55.70/barrel to $53.42/b and then drifted lower as oil prices recovered. WTI is trading at its overnight low of $54.41 while USDCAD barely budged.

The intraday and short term USDCAD technicals are bearish while prices are below 1.3150, looking for a break of the 1.3000-1.3050 area to trigger further losses to 1.2750.  A break above 1.3250 is needed to negate the downside pressure.  For today, USDCAD support is at 1.3090 and 1.3060.  Resistance is at 1.3120 and 1.3150.  Today’s Range 1.3060-1.3140