Overnight Range 1.3211-1.3280                  

USDCAD is flirting with the overnight high due to a surging US dollar.  The greenback is being supported by concern that today’s release of the FOMC minutes from September may reflect a more hawkish Committee than previously thought.

Sterling was in the spotlight in Asia. GBPUSD was plumbing the depths of yesterday’s range in very early Asia trading and then quickly reversed course, rallying from 1.2105 to 1.2321 by the time European trading started. The massive “short squeeze” was triggered on news that the UK labor party were demanding the right to scrutinize the governments Brexit plans. Prime Minister Theresa May agreed to the concession however, she didn’t agree to giving the MP’s a vote on the matter and GBPUSD sellers have returned with a vengeance.

Elsewhere, USDJPY continued its raggerally, rising from 103.16 to 103.64 by this morning’s New York open. AUDUSD climbed steadily helped by a better than expected Consumer confidence survey. Kiwi managed to squeak out a gain on the back of the AUDUSD move.

EURUSD was under pressure throughout the overnight session although the move was overshadowed by Sterling trading and UK political developments. The single currency broke below key support in the 1.1050-60 area but there was a lack of follow-through. Stronger than forecast Eurozone Industrial Production for August (Actual 1.6% vs. forecast 1.1%) gave EURUSD a short-lived lift. The break of support at 1.1040 is a bearish technical development and EURUSD is now probing support in the 1.0990-1.1010 zone.

WTI oil prices rose yesterday and touched $51.57. This morning, oil prices are back at $50.23/b undermined by yesterday’s report that Opec crude production in September, rose by 360,000 barrels. The drop in oil prices combined with divergent Canada/US interest rate paths is keeping USDCAD in demand.

USDCAD technical outlook.

The intraday USDCAD technicals are bullish while trading above 1.3210 but is struggling with the resistance area in the 1.3280-1.3320 zone.  Failure to overcome this barrier argues for a return to 1.3160.  A move below 1.3140 suggests a further correction to 1.3050.  A break above 1.3320 targets 1.3500.  For today, USDCAD support is at 1.3210 and 1.3160.  Resistance is at 1.3290 and 1.3320.

Today’s Range 1.3230-1.3220