USDCAD Open (6:00 am) 1.3300-03 Overnight Range 1.3299-1.3351
The US dollar backtracked on its approach to major support levels against a few currency pairs, helped by another dash of China-led risk sentiment improvement from data and trade news.
Caixin Services PMI for March (Actual 54.1) easily beat the forecast (52.3) and February’s result. (51.1), lifting the antipodean currency bloc.
The outlook for global growth improved with a story in the Financial Times suggesting the US and China have resolved most of their trade issues. The only stickler is how to enforce it. China’s negotiator, Vice Premier Liu He is in Washington today to continue the talks.
The news and the China data lifted NZDUSD above its major support level in the 0.6740-50 area and underpinned AUDUSD. EURUSD extended yesterday’s bounce off support in the 1.1170-80 area yesterday climbed to 1.1253 in early New York trading. Higher than expected Eurozone Retail Sales and Services PMI data added to the single currency’s demand.
GBPUSD continued yesterday’s rally, rising to 1.3194 from 1.3124. Prices are underpinned by speculation that Prime Minister Teresa May’s meeting with her Labour counterpart could result in a softer version of her deal getting approved. Prices were capped by fears of a major rift inside the Conservative party if Ms May works with Labour’s Jeremy Corbyn.
USDJPY traded sideways in a 111.23-111.56 range. Resistance held despite the improved risk tone and another rise in US Treasury yields.
WTI oil prices are trading at $62.68/barrel, after touching $62.96/b in Europe. Better than expected Chana and Eurozone data, improved risk sentiment, Opec production cuts, Iran and Venezuela sanctions and hopes of demand outpacing supply have fueled the gains. The rally will run into resistance at $63.63/b representing the 61.8% Fibonacci retracement level of the October 2017-December 2019 range.
USDCAD sank alongside broad US dollar weakness while getting an added lift from rising crude prices. BoC Governor Poloz’s speech on Monday isn’t hurting the Loonie either, as his domestic outlook was reasonably positive.
There is a lot of US data on tap today, but not much to get excited about. The highlight will be the ISM Non-manufacturing PMI data for March. The Canadian economic data cupboard is bare
Technical Snapshot
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while prices are below 1.3360. However, support in the 1.3300 area, which guards additional support at 1.3250 is hampering downside moves that would lead to a test of the uptrend line from October, currently sitting at 1.3190. A break above 1.3380 would target the 20019 downtrend line which comes into play at 1.3440. A break of this level targets 1.3550. For today, USDCAD support is at 1.3300 and 1.3260. Resistance is at 1.3340 and 1.3380.
Today’s Range 1.1.3270-1.3340
