The US dollar got a bit of reprieve this morning in New York. The greenback had been under pressure throughout the Asia and European sessions from mild risk aversion stemming from the oil price collapse on Thursday. That changed with the release of US economic data. US Durable Goods decline 0.7% in April which was far better than the forecast for a 1.4% decline and economists believe the underlying trend is still solid. Annualized Q1 GDP rose 1.2%, handily beating the 0.9% forecast.
EURUSD which had been stagnating within a 1.1170-1.1268 range all week is threatening a downside breakout which, if successful, would extend losses to 1.1080.
USDJPY reversed direction. FX traders appeared skittish and mildly risk averse overnight and bought yen. That changed after today’s US data. USDJPY opened in New York at 110.90 and is now trading at 111.28.
The GBPUSD downtrend that started on Thursday from 1.3010 accelerated overnight when another UK election poll was released. Prime Minister Theresa May’s Conservative Party’s lead shrank to just 5 points ahead of Labour.
Kiwi was bid throughout the overnight session. NZDUSD rallied from 0.7004 to 0.7075 just before the US data on a better than expected Fonterra mil price outlook. It trimmed those gains due to broad US dollar strength in New York.
Oil prices have rebounded from their overnight low of $48.27. Traders are still shaking their heads at yesterday’s 5% drop in WTI after Opec announced that they were extending production cuts for another nine months beyond June.
The rebound in oil prices undercut USDCAD which had tested 1.3494 in Asia. However, the correction has been shallow. The absence of Canadian data today will leave USDCAD direction at the mercy of oil prices
USDCAD Technical outlook:
The USDCAD technicals are bearish and in a downtrend channel while prices are below 1.3505. Support is seen at 1.3390 and then 1.3360. A break above 1.3505 would target 1.3575. For today, USDCAD support is at 1.3440 and 1.3390. Resistance is at 1.3490 and 1.3505.
Today’s Range 1.3440-1.3505
Chart: USDCAD 1 hour