GBPUSD soared from 1.3115 to 1.3236 after reports that Prime Minister Theresa May will rule out a no-deal Brexit.  That opens up another can of worms, including Labour backing a second referendum.  GBPUSD is in a minor uptrend above 1.3075 but needs a daily close above 1.3205 to put the focus on 1.3470.

The US dollar finished yesterday’s New York session on solid footing, led by a 0.48% rally in USDCAD.  President Trump’s tweet complaining to Opec about “too high” oil prices crushed WTI and the Loonie.  It didn’t get any better overnight.  USDCAD added to yesterdays gains and touched 1.3222 where it is trading as of 6:30 am.

EURUSD has been sidelined, trapped within a 1.1346-66 range and there wasn’t any economic data of note. Traders continue to be concerned about the ECB’s dovish stance and the risk of US tariffs on auto imports from the EU.  European equity indices are in the red, led by a 1.02% plunge in the FTSE 100.

USDJPY inched higher overnight, rising from 110.87 to 111.06, coinciding with a small rise in US 10-year Treasury yields.  USDJPY returned to the overnight low as Treasury yields eased.  Traders are waiting for concrete results from the US/China trade talks.

WTI oil prices clawed out small gains after touching $55.05/barrel in early Asia trading, rising to $55.53 just before the New York open.  Prices are supported by sentiment that Opec will ignore Trump’s tweet and stick to their production cut plan.

Fed Chair Jerome Powell testifies before Congress today, but his remarks should have little impact on FX trading.  There hasn’t been any shortage of Fed speakers, and they have been dovish.  Mr Powell stressed that the Fed would be patient at the January 30 FOMC press conference and he is not likely to change his tune, especially since, the US data has been mixed.

There is a lot of US data today, including Housing Starts, Building Permits, and S&P Case-Shiller Home Price Index.

USDCAD Technical Outlook

The intrraday USDCAD technicals turned bullish yesterday after prices rallied above 1.3150 resistance, following Trump’s oil tweet.  The rally snapped the week-long downtrend overnight when prices broke above 1.3215, which set the stage for a test of  resistance in the 1.3250-70. area. A retreat below 1.3180 would negate the upside pressure and shift the focus to 1.3115. For today, USDCAD support is at 1.3205, 1.3180 and 1.3150.  Resistance is at 1.3220-30 and 1.3270.  Today’s Range 1.3180-1.3270