The US dollar is treading water ahead of this weekend’s French elections. A weaker than expected Philadelphia Fed Manufacturing survey (Actual 22 vs. forecast 25) and a tiny tick higher in initials Jobless Claims (Actual 244,000 vs. forecast 242,000) did not provide any trading incentives.
EURUSD opened in New York at it’s high for the day (so far) and has inched lower ever since. Still it is well above yesterday’s close. Sterling has traded in a similar fashion but it is still above (slightly) the pre-election call low.
Asia markets were mixed. USDJPY bopped and weaved inside a 108.70-109.06 range. And then jumped to 109.34 in New York trading. Japan’s Trade data was better than expected.
Better-than expected New Zealand inflation data (CPI Actual 2.2% vs forecast 2.0%, y/y) powered NZDUSD from 0.6998 to a peak of 0.7050 by the time Europe opened. That move was completely reversed in New York.
The Australian dollar pulled itself off the lows, supported by broad dollar weakness and a forecast-beating NAB Business Confidence report. (Actual 6 vs. forecast 5) AUDUSD climbed from 0.7494 to 0.7531.
Oil prices recouped some of yesterday’s losses overnight helped by a report saying Saudi Arabia and Kuwait officials hinted oil production cuts will be extended. The positive sentiment wasn’t sustained in New York and WTI is probing yesterday’s bottom.
USDCAD is quietly bid and chewing through resistance in the 1.3490 area. Speculation is that a large “Buy” order is being managed which helps to explain why the Canadian dollar has been an underperformer. In recent days.
Wall Street moves, oil prices and the French election will provide FX direction. Geopolitical issues will be at the forefront, especially after North Korea warned of a “In the case of our super-mighty pre-emptive strike being launched, it will completely and immediately wipe out not only U.S. imperialists’ invasion forces in South Korea and its surrounding areas but the U.S. mainland and reduce them to ashes,”
USDCAD Technical outlook:
The intraday USDCAD technicals are bullish. Yesterday’s break of the 1.3440-60 resistance area has put 1.3600 in play although resistance at 1.3530 and 1.3555 will slow the rally. The speed of the uptrend warns that the currency is vulnerable to a correction. A break below 1.3440 would accelerate the decline and lead back to 1.3350. For today, USDCAD support is at 1.3460, 1.3430 and 1.3380. Resistance is at 1.3495, 1.3515 and 1.3540.
Today’s Range 1.3460-1.3530
Chart: USDCAD Daily