USDCAD Overnight Range 1.2052-1.2112      

The US dollar is down across the board as traders continue to trim positions ahead of tomorrow’s FOMC statement, exacerbated by the absence of top tier data.

The Asian session was quiet.  USDJPY traders ignored Fitch’s downgrade of Japans long term debt while AUDUSD traders ignored a speech by Glenn Stevens. The fact that Mr. Stevens didn’t say anything about monetary policy was probably why. Europe started quietly but EURUSD hasn’t looked back after breaking above 1.0900.

USDCAD is testing support in the 1.2050 area undermined by firm oil prices and dovish expectations for tomorrow’s FOMC statement. The IMM speculative short CAD positions, as reported by the Commitments of Traders Report (CoT) showed a modest decline to $2.7 billion from the previous week’s $3.2 billion. It is not unrealistic to assume that further unwinding is weighing on USDCAD.

Bank of Canada Governor, Stephen Poloz, testifying before the House of Commons Finance Committee this morning, didn’t really deviate from his April 15th Monetary Policy Statement which was a non-event for the currency.

USDCAD technical outlook

USDCAD is probing support at 1.2050 which is guarding the key 1.1980 level reprenting the uptrend from September 2014. A break of this level will extend losses below the 2015 low resulting in a move to 1.1660.

The intraday technicals are bearish while trading below 1.2105 looking for a break of 1.2050 to extend losses to 1.1970-1.2010. A move above 1.2105 will lead back to 1.2140.

Today’s Range 1.2050-1.2110