USDCAD Overnight Range 1.3130-1.3190  

The US dollar traded sideways to start the new month. China PMI’s (Caixin and official) were both below expansion territory (50).  A dip in the official rate was cancelled out by a rise in the Caixin and the FX reaction was short-lived. Asia also started with news of a Mario Draghi interview on the weekend where the ECB president sounded a tad less doveish about policy action in December than he did two weeks ago during the ECB press conference.

The Eurozone and UK PMI’s were upbeat.  The UK data was well above expectations (55.5 vs. forecast 51.3) and GBPUSD rallied.  It has since given back about ½ of the gains. The Turkish Lira soared on news that Turkey’s AK Party regained its majority. USDTRY dropped from 2.9150 to 2.7580 before bouncing back to 2.8100.

USDCAD was content to follow the US dollar vs the majors although with a bullish bias as oil prices slipped. Today’s US ISM manufacturing PMI was not a factor and the major data (NFP) isn’t due until Friday.

USDCAD technical outlook

The intraday technicals are bearish while trading below1.3150 looking for a break of 1.3060 to extend losses to 1.3010 and then 1.2960.  A move above 1.3150 negates the downtrend and puts the focus on 1.3270.  For today, USD support is at 1.3060 and 1.3010.  Resistance is at 1.3120 and 1.3150

Today’s forecast range is 1.3060-1.3130

Chart USDCAD 30 minute