USDCAD Overnight Range 1.3189-1.3236      

The FOMC surprised a lot of traders with a hawkish statement yesterday and the US dollar soared. The Fed was a less concerned that “global developments would restrain growth”; so much so that the line was omitted from the October statement and the US dollar screamed higher.

However, that was then, this is now.  The attention quickly shifted to today’s US data, particularly GDP. Q3 GDP rose 1.5%, in line with expectations and although the number looks soft it is being explained away by high inventories which supposedly subtracted 1.44% from the print.

In Asia, the RBNZ left rates unchanged and issued a slightly doveish statement. Kiwi was sold.  The BoJ meeting is tonight and there is still expectations of additional stimulus measures being announced.

The Canadian dollar is in its own little world.  Over the past few days, US economic data has been a tad less important to USDCAD direction than oil price movements and oil prices have been volatile. That’s a bit of a head-scratcher because despite the volatility, WTI has been in the same $42.50-$49.00/barrel range since the beginning of September. USDCAD will continue to be torn between US dollar price swings vs. the majors and oil prices.

USDCAD technical outlook

The intraday technicals are bullish while trading above 1.3170. However, that is only true if yesterday’s Oil rally sparked plunge to 1.3090 is ignored. It should be as USDCAD rallied faster than it declined. Resistance is at 1.3270-80.  A break below 1.3170 will lead to 1.3110 and then 1.3140

Today’s forecast range is 1.3180-1.3240

Chart USDCAD 30 minute with WTI overlay