USDCAD may have dodged a bullet. Just when it seemed like the 1.3560 floor was about to give way, domestic economic data got in the way. April CPI was 1.6%, year over year, unchanged from March but a tick below the 1.7% forecast. March Retail Sales were up 0.7%, a tad better than forecast. The data didn’t offer much fresh ammunition to encourage further USDCAD selling leaving direction to oil price movements.
The 172nd (Ordinary) Opec meeting begins on May 25th. Chatter that Opec members are willing to extend and possibly deepen, production cuts until March 2018 have bolster prices and offset high US inventory concerns. WTI is flirting with $50.00/barrel.
Overnight, the Asia FX session was subdued. USDJPY consolidated this week’s losses in a 111.12-111.68 range. It was down for the week but well-above Thursday’s 110.22 low.
AUDUSD and NZDUSD drifted higher, buoyed by the greenback’s politically charged sell-off. Both currency pairs are finishing the week stronger than where they started.
EURUSD opened in Asia with a bid, recouped all of Thursday’s losses and is trading at this week’s high in New York (currently 1.1184). Eurozone current account surplus narrowed in March but the news was ignored.
It will be a short day for many Canadian’s as today is the unofficial start to the summer. People will be knocking off work early to get a head start on the long weekend.
Sterling drifted quietly higher until mid-morning in Europe when it spiked to 1.3015 from 1.2944 for no apparent reason. Which is where it sits in New York trading. German chancellor Angela Merkel said that Britain would be treated fairly but will pay the Brexit price.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while trading below 1.3640 looking for a break below 1.3560 to extend losses to 1.3505 and then 1.3440. A move above 1.3640 suggests further 1.3570-1.3770 range trading. For today, USDCAD support is at 1.3560, 1.3530 and 1.3505. Resistance is at 1.3610, 1.3640 and 1.3680.
Today’s Range 1.3510-1.3610
Chart: USDCAD daily
Source: Saxo Bank
USDMXN continues to trade violently inside a wide 18.4570-19.2500 trading range. President Trump’s political woes and the risk of Nafta renegotiation are driving the currency pair. Banxico caught half the market by surprise when it announced a 25-bps rate hike to 6.75%. USDMXN plunged from 19.2025 to 18.7235 on the news. The intraday and short term technicals are bearish while prices are below 19.25 but need a decisive break of 18.4570 to extend losses to 17.56
Chart USDMXN 4 hour