USDCAD Overnight Range 1.2183-1.2255          

USDCAD was largely sidelined overnight and remains well off of Friday’s lows as it currently probes resistance in the 1.2250 area. The fundamental outlook for the Loonie has taken a turn for the good on the back of a rosier economic outlook by the Bank of Canada and better than expected economic data last Friday. Higher oil prices are also supporting the Canadian dollar.

China kicked off the FX week when the PBoC announced a 100 point cut in the Reserve Requirement Ration (RRR), hoping to boost bank lending.  The news lifted AUD and NZD but that only lasted a short while and both currencies quickly returned to Friday’s lows during the European session.  EURUSD trading will be governed by Greece news while the pound will be pounded by UK election headlines.

The BoC governor, Stephen Poloz, will be speaking in New York this morning and traders will be looking for additional bullish CAD remarks. Tomorrow’s Federal budget should be a non-event although forecasts for balanced budgets may help the currency.

USDCAD technical outlook

The intraday USDCAD technicals are modestly bullish while trading above 1.2210 looking for a break of resistance at 1.2260 to extend gains to 1.2320.  A move below 1.2210 argues for a retest of the Friday low of 1.2089. For today, USDCAD support is at 1.2210 and 1.2160.  Resistance is at 1.2250-60, 1.2290 and 1.2320

Today’s Range 1.2180-1.2260