May 21, 2019
USDCAD Open (6:00 am EDT) 1.3422-26 Range (Fri. close/Tues. open) 1.3409-1.3454
USDCAD is opening near the bottom of its range since Friday. Prices were undermined by a surge in oil prices after Opec suggested it would extend production cuts for the rest of the year. The ongoing hostile rhetoric between Iran and the US and the risk of supply disruptions from the middle east are supporting crude prices.
The US dollar opened in New York on a mixed note. It gained against EUR, GBP, JPY, and NZD and lost ground against CAD, CHF and AUD.
GBPUSD drifted lower due to the risk of a “no-deal” Brexit. Prices bounced in early New York trading after a UK government spokesman said that Cabinet discussed a new deal on Brexit to be presented to parliament. GBPUSD rallied from 1.2687 to 1.2733.
EURUSD is weighed down by EU election concerns and dovish comments from ECB members. The OECD May economic outlook didn’t help. It warned that trade tensions and the slowdown in China are key risks to global growth. EURUSD is testing critical support in the 1.1140 area, which if broken, targets further losses to 1.1005.
USDJPY is at the top of its recent 110.02-30 trading range supported by a tiny downgrade in the US/China trade tensions after the American’s eased some restrictions on Huawei, albeit for only three months.
AUDUSD rallied on Monday following a surprise win by the centre-right party in the federal election. Those gains were erased overnight after the RBA minutes, and Governor Philip Lowe reminded markets of the central bank’s easing bias. Reuters reports that the four major Australian banks expect a rate cut in June. NZDUSD tracked AUDUSD lower.
The only data of note today is US Existing Home Sales.
The intraday USDCAD technicals flipped back to bearish with the break below 1.3440. However the three-week 1.3370-1.3520 range is still intact. A break of major support in the 1.3370 area opens the door to a drop to 1.3300. The 38.2% Fibonacci support of the October 2018 January 2019 range is at 1.3404 which if broken, targets 1.3302. A move above 1.3450, targets 1.3520. Today’s Range: 1.3440-1.3520