September 25, 2019

USDCAD Open (6:00 am EDT) 1.3251-55         Overnight Range 1.3238-1.3267

President Trump believes the world revolves around him.  Financial markets appear to concur. Mr Trump had center stage at the United Nations for a thirty-seven minute speech. It should have given the media a couple of days worth of fodder. It started to, right up until House of Representatives Speaker Nancy Pelosi announced the House would begin a formal impeachment inquiry into Donald Trump.

 The US dollar was sold on the news and finished the day with losses across the board.  It was a different story overnight, and the greenback opened in New York with gains all around. The FX price action proved to be all sizzle-no steak.  EUR, CAD, AUD opened nearly unchanged between Tuesday and today.  JPY and CHF are a tad higher as is NZD. GBP is a tick lower.

FX Market Snapshot

Change in Currency value vs the US dollar- Tuesday NY open to  Wednesday NY open

President Trump’s UN speech was on script. He took shots at China, complaining about their market barriers, currency manipulation and forced technology transfers. Iran was another target. He said the nation was one of the “greatest security threats.”

The Democrats plan to impeach Trump is the start of a long, tedious process. It appears to be just Democrats playing politics because they fear they can’t beat Trump in the ballot box.

EURUSD started to slide in Asia, falling from 1.1021 and hitting 1.0993 during the European session and is trading in New York at 109.80. EURUSD continues to be weighed down by soft economic data, a dovish ECB and bearish technicals.

GBPUSD is in a world of its own. British parliamentarians continue to play “silly buggers” as the “no-deal” Brexit clock ticks down. There are only 35 days left before the UK leaves the EU and UK politicians are focused on demanding apologies from Boris for proroguing parliament.  GBPUSD rallied to 1.2502, yesterday after the UK Supreme Court ruling proroguing parliament was illegal. It erased that entire move overnight.  GBPUSD dropped from an overnight peak of 1.2494 to 1.2374 in New York trading.

USDJPY fell to 106.96 from 107.70 yesterday, following the Democrats impeachment announcement due to safe-haven demand for yen.  It recovered half of those losses overnight. USDCHF tracked USDJPY moves.

NZDUSD spiked to 0.6346 from 0.6305 after the RBNZ statement was thought to be less dovish than expected. The RBNZ left rates unchanged, as expected. The statement said, “there remains scope for more fiscal and monetary stimulus, if necessary, to support the economy and maintain our inflation and employment objectives.” Prices retreated steadily and opened in New York at the overnight low. AUDUSD was undermined by resurgent US dollar and followed NZDUSD lower.

USDCAD tracked US dollar moves but remained trapped in its 1.3140-1.3340 trading band. There aren’t any Canadian economic reports available, BoC officials are quiet, and the Federal election is a non-event (so far) for traders.

US Housing starts are on tap as are speeches from Chicago Fed President Charles Evans and Fed Governor Lael Brainard

USDCAD Technical View

The intraday USDCAD technicals are bullish while prices are above 1.3230 and bearish below 1.3340. A decisive topside break would target 1.3550 and then 1.3660.  A break below 1.3230 keeps the 1.3040-1.3340 range intact.  For today, USDCAD support is at 1.3230 and 1.3190.  Resistance is at 1.3290 and 1.3310.  Today’s Range 1.3230-1.3290.

Chart: USDCAD 30 minute