USDCAD Overnight Range 1.3275-1.3375  

Happy Thanksgiving America. The annual feast and shopping festival will kick off around 9:00 am PST as traders start heading for home. The keeners among them actually showed up to the office today to check out this morning’s data.  They were suitably impressed.  US Durable goods rose an impressive 3.0% (forecast 1.5%), jobless claims declined and consumer spending inched higher. Taken together, it leaves the FOMC on the highway to hikes, rate hikes that is.

The ECB interrupted a gentle US dollar decline that had continued from Asia, when Reuters posted a headline, “ECB discusses two-tiered bank charges, broader bond buys: officials”. That was all traders need to whack EURUSD and whack it they did. EURUSD dropped to 1.060 from 1.0670 in a flash.  However, that move may be more of a sign of thin markets than anything else, since the “news” is really news at all-Mario Draghi has alluded to that strategy a couple of times since October.  Nevertheless, a rising dollar sinks all currencies and that was the case today.

WTI oil prices are sloshing around on contradictory rumours and media reports. Today’s news suggests $20.00/barrel oil is in the cards because non-Opec producers are unlikely to cooperate with Opec and curtail production. Making matters worse is that reportedly, Iran plans to boost productions as soon as the sanctions are lifted. Regardless, this is not a new theme so the impact has be relatively muted.

USDCAD is wed to oil price movements. If today’s weekly EIA report shows a very large drawdown in supplies, another short squeeze in oil is likely which will lead to USDCAD selling.

USDCAD technical outlook

USDCAD is in an intraday downtrend while trading below 1.3360 which is supported by yesterday’s break of a minor uptrend. In the short term, a break of support at 1.3270 and confirmed by a move below 1.3240 could lead to a steeper drop and a test of 1.3070.  For today, USDCAD support is at 1.3270, 1.3240 and 1.3210.  Resistance is at 1.3340, 1.3370 and 1.3430

Forecast Range for the day 1.3290-1.3360

Chart USDCAD and WTI 15 minute, highlighting intraday correlation