USDCAD Overnight Range 1.3863-1.3900
Markets ran amok on the first trading day of 2016. A 7.0% plunge in China’s CSI300 index triggered circuit breakers which halted trading for the day and set the tone for a volatile European session.
Saudi Arabia’s spat with Iran ratcheted up Middle East tensions, boosted oil prices (briefly) and sparked a bout of risk aversion trading. Kiwi and Aussie got double tapped; once on the move to risk off and again on the China equity market collapse.
The China equity malaise and the boost in Middle East tensions led to European equity indices dropping across the board and choppy FX trading in the majors. Welcome to 2016.
The Canadian dollar continues to have a negative bias and remains wed to oil prices although this theme is rather stale.
USDCAD technical outlook
The intraday USDCAD technicals are bullish with the move back through resistance at 1.3880 but a failure to extend gains above 1.3940 may put the focus back on support at 1.3800 which is where the short term uptrend line resides. For today, USDCAD support is at 1.3880 and 1.3840. Resistance is at 1.3940 and 1.3980.
Forecasted Range 1.3840-1.3940
Chart USDCAD 4 hours