Photo: Wikimedia/coca cola

March 26, 2021

USDCAD open (6:00 am ET) 1.2574-78,  Overnight Range 1.2572-1.2608,  Close 1.2615

FX Weekly Ranges at a Glance 

Source: IFXA Ltd/RP

FX Recap and Outlook

The US dollar opened lower after an uneventful overnight FX session.  The commodity bloc currencies led EUR, and GBP higher, while JPY opened a tad lower.  Global equity markets were far livelier.  China’s Shanghai Shenzhen CSI 300 index jumped 2.27%, while the Nikkei and Hang Seng closed about 1.56% higher.  Gold and oil prices also climbed.

China continues to misbehave, especially towards Australia.  Chinese industry reps said some Australian hay imports were halted.  China also announced tariffs of up to 200% on Australian wine.  Also, Beijing announced retaliatory sanctions against nine UK officials.  China is now feuding with the US, UK, EU, Canada, and Australia.

EURUSD traded in a 1.1767-1.1797 range due to the improved global risk tone, with better than expected German IFO data adding a bit of support.  The Ifo Business Climate Index  rose from  92.7  points1in February  to  96.6 points in  March.  This is  its  highest value  since  June 2019.  EU President Ursula von der Leyden  COVID-19 warnings may limit EURUSD gains.  She warned yesterday that “we are at the beginning of a third wave of the virus, and the situation is of great concern.” German Chancellor Angela Merkel agrees.  EURUSD technicals are bearish below 1.1870, which is also the 200-day moving average.

GBPUSD  traded in a 1.3733-1.3790 range after snapping a two-week downtrend when prices broke above 1.3730.  The currency pair continues to benefit from BoE Chief Economist Andy Haldane, who predicted a “rip-roaring” recovery, in an interview on Thursday.

USDJPY rallied due to favourable risk sentiment and on the rise in US 10-year Treasury yields from 1.62% to 1.66%.  Tokyo Mar CPI fell 0.2% y/y, which was better than February’s 0.3% drop but worse than expected.

AUDUSD shrugged off the latest hostile Chinese trade actions and climbed from 0.7579 to 0.7626.  NZDUSD followed AUDUSD higher.

Oil prices continue to be supported by Ever Green being “Ever Stuck.” And blocking the Suez Canal.  Missile attacks aimed at Saudi oil facilities failed but are also a concern.  The third-wave COVID-19 outbreak in large parts of Europe weighs on prices as it could delay a rebound in global crude demand.

USDCAD dropped on improved risk sentiment and higher oil prices.  USDCAD is weighed down by expected collateral benefits for Canada from Biden’s $1.9 trillion stimulus plan and forecasts for higher crude prices.

Michigan Consumer Sentiment is expected to jump to 83.6 from 83 in February, and Personal income and expenditure (PCE) price index to rise to 1.6% from 1.5%.

USDCAD Technicals:  The intraday technicals  are bearish below 1.2650 which is the downtrend line from the beginning of February, but need a drop below 1.2550 to shift the focus to 1.2360. For today, support is at 1.2550 and 1.2510. Resistance is at 1.2620 and 1.2650. Todays Range 1.2540-1.2620

Chart: USDCAD 4 hour

Source:  Saxo Bank

FX open (6:00 am EDT) High, Low, and previous close

Source:  Saxo Bank