USDCAD Overnight Range 1.2472-1.2600          

US Retail Sales in March substantially outpaced those in February but FX traders were not amused.  In fact, judging by the plunge in the US dollar against the majors, they were rather irked. It wasn’t that the data was bad, but rather it was because it missed the forecasts. For those keeping score, two big pieces of data (NFP, Retail Sales) and two big misses equals rates on hold for a lot longer than anticipated.  Having said that, there is still a lot of wood to chop before September, which is still a viable rate hike month.

Overnight markets were rather subdued awaiting this morning’s release of US Retail Sales. Koichi Hamada, the advisor to Japan’s President Abe, who caused a minor kerfuffle in USDJPY yesterday by suggesting 105.00 was an appropriate level has backtracked. He now says that the level may be appropriate but that USDJPY is going lower and has returned to obscurity.

Traders in Europe mostly ignored a large amount of data from the Eurozone while UK traders briefly sold GBPUSD on the inflation report.

Once again USDCAD bulls are being squeezed with stop losses triggered on the break of 1.2540 and again at 1.2510.  The soft US dollar vs. the majors, steady and firm WTI prices and a bit of position adjustment ahead of the BoC meeting tomorrow are behind the move.

 USDCAD technical outlook

Today’s drop in USDCAD from 1.2600 to 1.2470 is approaching the short term uptrend line from November in the 1.2430-50 area.  A break below 1.2440 risks a retest of major support in the 1.2330-50 area.  If that level breaks it is a straight drop to 1.2050. Only a bounce above 1.2510 negates the downward pressure.

Today’s Range 1.2450-1.2510