USDCAD Overnight Range 1.3832-1.3925
Yesterday’s USDCAD losses became today’s USDCAD gains. Tuesday’s entire move has been reversed this morning and the culprit is oil. Oil prices rose yesterday in part due to cold weather and snow on the east coast. The spike in WTI prices from $36.60/b to $37.90/b drove USDCAD from 1.3935 to 1.3820. Today, WTI is back at $36.60/b and USDCAD is 1.3915. That move is also definitive evidence that FX markets are extremely thin as they react violently to the sketchiest of influences.
All the G-10 currencies lost ground against the US dollar overnight, with the exception of GBP and CHF. Part of the reason for the US dollar strength is being attributed to speculation of dollar demand for year end portfolio rebalancing. If true, it makes sense to expect more of the same tomorrow.
USDCAD technical outlook
The USDCAD uptrend from the end of November remains intact while trading above 1.3830. Yesterday’s failure to extend losses below 1.3810 and the subsequent bounce above 1.3880 puts the focus back on 1.3990, although resistance at 1.3940 may prove sticky. For today, USD support is at 1.3870 and 1.3830. Resistance is at 1.3940 and 1.3980.
Forecasted Range 1.3870-1.3940
Chart USDCAD 15 minute and Oil 15 minute