USDCAD Overnight Range 1.2673-1.2744           

The US dollar found its mojo, at least for the moment. The US dollar caught a bid in European trading led by EURUSD. The single currency broke below minor support in the 1.1390 level and  dropped to 1.1344 by the time New York walked in.  The move may be just a case of profit taking or  it may have had something to do with ECB president Mario Draghi’s speech.  Mr. Drahi didn’t provide any fresh monetary insight so attributing the EURUSD move to his remarks would be a bit of a stretch.  Sterling chased EURUSD lower.

The Reserve Bank of New Zealand was the star of the show in Asia.  They left the Overnight Cash Rate (OCR) unchanged surprising about 30% of the market.  But that was enough to launch NZDUSD from 0.7006 to 0.7145. The statement was rather doveish in that it maintained the easing bias and chirped about the high New Zealand dollar. It has since drifted lower in line with the US dollar rally.  China inflation data did not have any impact.  USDJPY declined as did the Nikkei which was down nearly 1%.

USDCAD trading has been tracking general US dollar sentiment and WTI prices. WTI spent most of the overnight session hugging $51.50/b but dropped in Europe when the US dollar started to rally. There is a bit of bottom tier data in Canada today (Capacity Utilization and New Housing Price Index.  They shouldn’t have any impact on the Loonie.  However, the Bank of Canada governor, Stephen Poloz’s press conference following the release of the BoC review could have.  Generally, the BoC review doesn’t have much to do with USDCAD trading, but you never know what Mr. Poloz will say, if he speaks about monetary policy.

USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.2750 looking for a move below 1.2710 to extend losses to 1.2660. break of 1.2660 sets up a re-test of the May low of 1.2462.  A break above 1.2780 would suggest that a short term bottom (at 1.2658) is in place and extend gains to 1.2900.  The hourly RSI is approaching overbought (at 70) but it is not quite there yet suggesting USDCAD may have a bit more upside.  For today, USDCAD support is at 1.2710 , 1.2690 and 1.2660.  Resistance is at 1.2750, 1.2780 and 1.2820

Today’s Range 1.2690-1.2770

Chart USDCAD hourly

cad 9th june