Asia walked in and sold US dollar’s. USDJPY dropped to 110.53 from 111.04.  Broad dollar weakness, bearish technicals and thoughts that the Bank of Japan is considering tapering, undermined the greenback.

AUDUSD and NZDUSD jumped aboard the bearish dollar bandwagon.  AUDUSD rallied from 0.7902 to 0.7906, underpinned by higher commoidty prices.  NZDUSD climbed from 0.7232 to 0.7292 as previous short positions got unwound or stopped out.

EURUSD opened with a bid and clibed steadily, rising from 1.2188 to 1.2295.  The demand is fueled by elevated expectations for hawkish comments at the January 25, ECB policy meeting with some traders talking of a rate hike. A rate hike is not in the cards, according to ECB Board member and Bundesbank President, Jan Weidmann.  He said “As far as central bank rates in the euro area are concerned, however, the immediate risk of change is currently low.

Sterling has taken a walk on the wild side.  Rumours that Spain and the Netherlands were favouring a Brexit deal that kept Britains close ties with the EU. The report has since been denied.  However, GBP soared, rising to 1.3818 from 1.3729 before retreating to 1.3770 by noon in the UK.

WT oil prices drifted down from the Asia peak of $64.57 and are trading at $64.15.  A rise in US oil rigs was ignored.  Gold prices rose to $1,344.59 on broad US dollar weaknes but eased to $1,241.66 by mid-day in London.

USDCAD is tracking EURUSD moves but appears reluctant to move lower, despite on-going EURUSD strength. The Bank of Canada is widely expected to raise rates on Wednesday, however, traders are concerned that the policy statement may be “cautious.”

The US is closed for Martin Luther King Day which suggests a very quiet day ahead.  There isn’t any data from Canada, leaving the FX majors to consolidate the overnight moves.

USDCAD Technical outlook:

The intraday USDCAD technicals are bearish while trading below 1.2450 looking for a break of 1.2410 to extend losses to 1.2350.  A move above 1.2450 will lead to 1.2480 and then 1.2550.  Longer term, a break of support in the 1.2350-80 area would lead to further losses to 1.2260.

Today’s Range 1.2410-1.2450