USDCAD Overnight Range 1.1935-1.2025
USDCAD plunged following a weak US Retail Sales report, dropping to 1.1935 from 1.1970 but it has since returned to the pre-data price. (Actual 0.0% vs. Forecast 0.2%, Core 0.1% vs Forecast 0.5%). As has been the case lately, the data is inconclusive. The headline data was poor, but the revisions to last month’s data took some of the sting out of them, which explains the post data bounce.
USDCAD traders appear to be reassessing their bullish bias because: a) The BoC is neutral, not doveish, b) Oil prices may have bottomed, c) the long term US dollar rally on anticipation of higher rates, may have run its course. If so, USDCAD rallies will attract sellers.
Overnight, Kiwi was the story in Asia.The release of the Financial Stability Report followed by a speech by the RBNZ governor created a minor kerfuffle with NZDUSD sinking and then climbing. When it was all said and done, NZDUSD was above pre FSR levels.
Cable was on the wires in Europe. The Labour Report boosted GBPUSD but a downgrade to the Quarterly Inflation Report forecasts erased the gains.
USDCAD technical outlook
The intraday USDCAD technicals are bearish while trading below 1.2040 with today’s break of support at 1.1970 fueling the losses. The bounce off major support in the 1.1940 area has been shallow and unable to get above 1.1980 which argues for another visit to 1.1940. A decisive break of this level and the next stop will be 1.1735. A move above 1.1980 ease some of the pressure but only a move above 1.2040 negates the downtrend. For today, USD support is at 1.1940 and 1.1890. Resistance is at 1.1980 and 1.2020
Today’s Range 1.1930-1.1980
Chart: USDCAD 1 hour with downtrend