USDCAD Overnight Range 1.2440-1.2540      

USDCAD dropped sharply, from 1.2525 to 1.2445, immediately following the release of the much better-than expected Canadian Q4 GDP report. (Actual 2.4% vs Forecast 2.0%, q/q, annualized). The details showed that this report was really just a “3 dressed up as a 9”.  Inventories rose and exports declined.  Nevertheless, it was “ok”. USDCAD traders will now retreat into their shells and await the BoC rate decision tomorrow.  Until then, the Loonie’s direction will be governed by oil prices and early US data releases.

Overnight, Asia was busy while Europe was uninspired. The Asia session was all about the Reserve Bank of Australia (RBA). Traders were split on whether or not the RBA would cuts rates.  They didn’t, but they left the “shrimp on the barbie” for future cuts.  The AUDUSD rally, post statement, was rather subdued. USDJPY slid from the highs on a Wall Street Journal story quoting Japanese PM Advisor Etsuro Honda suggesting delaying further monetary easing.The European session was mostly sideways. German January Retail Sales soared (2.9% vs forecast 0.4$) giving EURUSD a pop which quickly faded on Greece concerns.

USDCAD technical Outlook

The intraday USDCAD technicals are mixed: bearish below 1.2440-60 and bullish above 1.2540-60. In the short term, the USDCAD uptrend from the beginning of January remains intact above 1.2420-40 but needs to break resistance in the 1.2560 area to extend gains. For today, USD support is at 1.2480 and 1.2450.  Resistance is at 1.2530 and 1.2560

Today’s Range 1.2440-1.2510

Chart: USDCAD hourly with post GDP break shown