USDCAD managed to hang on to most of yesterday’s gains, overnight.  The Bank of Canada (BoC) left rates unchanged at 1.75% but downgraded the forward guidance in the policy statement.  They changed a key phrase from saying “rates would need to rise over time into a neutral range” to saying “the outlook warrants a policy rate below its neutral range.”

Economists and analyst were uniform in suggesting that domestic rates are on hold and some pushed rate hike forecast into 2020. USDCAD smashed through significant resistance at 1.3380, opening the door to further gains to 1.3550.

FX markets were a tad subdued in Europe ahead of this morning’s ECB meeting.  Analysts are expecting a dovish result, with the ECB talking about the need for another round of Targeted Long Term Refinancing Operations (TLTRO) blaming Brexit concerns and the recent string of weak economic data for the move.   Eurozone data included a 0.3% q/q change in Employment and a lower than forecast Q4 GDP result (Actual 1.1% vs forecast 1.2%) EURUSD was asleep in a 1.1302-1.1319 range.

GBPUSD is trading at the bottom of its overnight 1.3146-1.3183 range.  Traders ignored the 5.9% y/y jump in Halifax House Prices.  Bloomberg reports that the EU refuses to reopen the Brexit talks, much to the UK’s chagrin.

In Asia, AUDUSD weaker than expected Retail Sales data,  tempered a rally after Australia recorded its second highest trade surplus ever.  AUDUSD climbed to 0.7050 from 0.7022.

Oil prices shrugged off yesterday’s EIA report of a 7.06 million barrel increase in US crude inventories.  Prices continue to be underpinned by Opec production cuts and Venezuela sanctions. WTI oil climbed from $55.55/barrel to $56.81/b in early New York trading.

The ECB meeting and ECB President Draghi’s press conference are the key events this morning which will overshadow US data releases.  Those releases include Jobless Claims and Unit labour costs. 

USDCAD Technical Outlook

The intraday USDCAD are bullish following the break above 1.3380, which now reverts to support. There is additional resistance in the 1.3465-80 area before a probe of the quadruple top (daily chart) at 1.3665. The long term uptrend from February 2018 is intact while prices are above 1.3140  For today, USDCAD support is at 1.3390 and 1.3360.  Resistanced is at 1.3450 and 1.3480.

Today’s Range 1.3390-1.3480