April 25, 2019

USDCAD Open (6:00 am EDT) 1.3510-13   Overnight Range 1.3486-1.3514

The US dollar is in demand.  Weaker than expected Eurozone data yesterday contrasting with generally strong US data knocked EURUSD to levels last seen in June 2017.  The ECB Economic Bulletin didn’t help matters.  It reminded traders of Mario Draghi’s previous comments that “The risks surrounding the euro area growth outlook remain tilted to the downside, on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets.”  EURUSD extended yesterday’s losses and dropped from 1.1161 to 1.1131.

Sterling continues the slide that started ten days ago.  GBPUSD has fallen from 1.3117 on April 15 to 1.2872 this morning, in New York.  Uncertainty around Brexit and Prime Minister Theresa May’s future continue to weigh on the currency.

The Bank of Japan left policy rates unchanged and said they would stay low until mid-2020.  They also trimmed their inflation forecast to 1.3% from 1.4% for 2020. USDJPY dropped from 112.22 to 111.86 on the news.

Australia and New Zealand markets were closed for Anzac day.

Oil prices recovered from yesterday’s news that US crude inventories rose 5.47 million barrels in the week ending April 19. WTI oil prices climbed from $65.57 to $66.16/b in part because of quality issues with Russia’s crude supplies to Poland and Germany.

The crude oil rally didn’t do anything for the Canadian dollar.  That’s because the Bank of Canada knee-capped the currency yesterday.  They left interest rates unchanged which was expected but dropped all references to “future rate hikes.”  The dovish BoC and bullish USDCAD technicals have traders looking for a break of resistance in the 1.3525 area to lead to a test of 1.3700.

The US dollar may get additional support if today’s March Durable Goods Orders are better than expected.  The Canadian data calendar is empty.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish while prices are above 1.3360.  A break above resistance in the 1.3520 area will lead to 1.3560 and then 1.3700.  A move below 1.3360 suggests a period of 1.3290-1.3520 consolidation.  For today, USDCAD support is at 1.3480 and 1.3460  Resistance is at 1.3520 and 1.3560  Today’s Range 1.3480-1.3540

Chart: USDCAD  4 hour