USDCAD Overnight Range 1.2200-1.2254    

USDCAD held on to yesterday’s gains despite being largely ignored in a lively overnight session. Across the board US dollar demand was the main theme. USDJPY ignored greatly improved Q1 prelim GDP and tested resistance at 121.05. AUDUSD ignored a stellar Consumer Confidence report and headed lower. In Europe, EURUSD selling drove EURUSD below 1.1100 to 1.1065 on the back of renewed EU/USA economic and interest rate divergences concerns. The BoE minutes were thought to be slightly hawkish which gave GBPUSD a short lived boost.

Yesterday’s speech by the BoC governor was vintage Poloz. He stuck to his view that growth will rebound and the economy will reach full capacity by the end of 2016 while simultaneously stating how uncertain everything was. Traders tuned him out.

FX markets are likely to trade in fairly narrow ranges until this afternoon’s release of the FOMC minutes. Any indication that the minutes were far more hawkish that what the statement implied, will ignite another bout of US dollar buying.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.2140 although the rally has stalled within a narrow 1.2240-1.2260 band. Failure to decisively take out the top side resistance coupled with the breach of the minor uptrend line from Monday (at 1.2230) warns of further weakness to 1.2170.  Meanwhile, the downtrend line from the end of March remains intact.

Today’s Range 1.2190-1.2260

Chart: USDCAD 1 hour with resistance zone