USDCAD Overnight Range 1.3550-1.3605  

The US dollar is in a giving mode. It has given back some of its recent gains and is down across the board in New York trading.  There is no catalyst for the move suggesting that it is entirely due to position adjusting and profit taking in a quiet market.

The overnight story was only slightly different.  The US dollar declined against the G-10 currencies with the exception of the antipodeans.  AUDUSD remained depressed due to low commodity prices and the prospect for even lower prices. NZDUSD is a victim of position adjusting into today’s RBNZ interest rate decision, due at 12:00 pm. PST.  There is a 50/50 chance of a 0.25% cut.

European FX markets were quiet ahead of Thursday’s Swiss National Bank and Bank of England Interest rate decisions and policy statements. Both central banks are expected to leave rates as they are. The EURUSD short squeeze continued and the single currency printed as high as 1.0942 helped by better-than-expected German data.

USDCAD got a brief reprieve late yesterday afternoon when the American Petroleum Institute reported a bigger drawdown than expected.  WTI prices ticked higher and USDCAD declined.

There isn’t any American or Canadian data of note today leaving FX traders to react to headlines. USDCAD remains wed to WTI movements so this mornings Department of Energy oil report will be key, at least for today.

USDCAD technical outlook

The USDCAD technicals are bullish.  The October uptrend remains intact while trading above 1.3370.  The break through resistance in the 1.3450-60 area opened the door to a move to 1.4000.  However, the steepness of the rally suggests that some consolidation may occur and USDCAD could revisit 1.3460 before moving higher. For today, USDCAD support is at 1.3550, 1.3520 and 1.3490.  Resistance is at 1.3605, 1.3630 and 1.3680

Chart 4 hour with uptrend and support