April 29, 2019

USDCAD Open (6:00 am EDT) 1.3466-69   Overnight Range 1.3453-1.3472

US Treasury Secretary Steven Mnuchin said about the US/China trade negotiations: “They’re in the final laps.”  The same can be said about April and if the major Wall Street indices stay around current levels, the month end 11:00 am (EDT) portfolio managers rebalancing flows will be US dollar negative.  But that’s tomorrow.  Today, FX markets were pretty quiet to start the week.

Japanese markets were closed and will be all week for “Golden Week holidays which had a dampening effect on Asia liquidity. AUDUSD and NZDUSD were supported by the improving prospects for a China/US trade deal.

EURUSD inched down from its overnight high after Eurozone data was weaker than expected. Economic Sentiment, Business Climate, Industrial Confidence and Consumer Confidence Indicators were a tad weaker than expected for April which dropped EURUSD into the middle of its 1.1145-1.1166 range.

GBPUSD drifted higher in a taught range.  Traders ignored remarks by Bank of England Governor Mark Carney who was spouting off about “The new economy.”

Oil prices have slid steadily.  WTI touched $66.29/barrel on April 29 and hit $62.49 in Europe this morning, before bouncing to $63.00 in early New York trading.  Traders ignored news of supply disruptions in Nigeria and seemingly preferred to book profits ahead of month end.

USDCAD drifted lower alongside the G-10 majors on Friday and then consolidated those losses in a dull overnight session.  Traders have ignored oil prices and focused on the Bank of Canada’s neutral policy stance.

The FOMC and Bank of England policy meetings are Wednesday and Thursday, respectively which suggests existing trading ranges will stay intact until they are over.  US Personal consumption and Expenditure Price index data is on tap today.

USDCAD Technical Outlook

The intraday are bearish while prices are below 1.3480 and looking for a move below 1.3440 to test 1.3410 which is the short term uptrend line from April 12.  A move above 1.3480 will extend gains to 1.3520.  Longer term, the USDCAD technicals are bullish above 1.3250,  A decisive break above 1.3525 targets 1.3800.  For today, USDCAD support is at 1.3440 and 1.3410. Resistance is at 1.3490 and 1.3520  Today’s Range 1.3440-1.3520