USDCAD Overnight Range 1.3270-1.3314        

Today’s Retail Sales data was highly anticipated, mostly because it was the only tier 1 data released this week.  October Retail Sales rose 0.1%, m/m, ex-auto’s rose 0.2 which were both below forecasts.  PPI data was also below consensus. Normally, these data misses would have been a wee bit US dollar negative.  But they weren’t. Instead, traders bought US dollars in the belief that last week’s blow-out nonfarm payrolls report is far more important to the Feds intentions than today’s data.

USDCAD was relatively subdued overnight.  That changed when the US dollar bounced vs the majors and WTI prices dropped from their overnight peak. WTI continues to be pressured by over-production and rising storage capacity constraints in the US.  A break of $40.84/barrel may lead to a re-test of the August low of $37.73. If it occurs, it should be enough to drive USDCAD to the 2015 peak of 1.3455.

It was another quiet session in Asia and Europe wasn’t much better.  Eurozone GDP data was mostly weaker than forecast (Q3 GDP 0.3$, q/q vs. forecast 0.4%) while the Eurozone trade surplus widened.  EURUSD was unfazed by the data.

USDCAD will spend the rest of the day tracking WTI and US dollar movements. Although the USDCAD bias is bullish, until resistance in the 1.3340 area is decisively broken, USDCAD will continue to chop around within a 1.3240-1.3340 range.

USDCAD technical outlook

The intraday USDCAD technicals are bullish. The November uptrend is intact while trading above 1.3270 which is the same level where the 1 week downtrend was broken.  The intraday target is 1.3340 (this week’s high) and then 1.3380 and 1.3455. A move below 1.3270 will lead to1.3190-1.3210 and imply additional 1.3200-1.3340 consolidation.  For today, US support is at 1.3270 and 1.3230.  Resistance is at 1.3320 and 1.3350.

Forecast Range for the day 1.3270-1.3340

Chart USDCAD 1 hour

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