Overnight Range 1.2967-1.3046
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close-Jul 5 (4pm) to July 6: 00 am PST
Brexit fall-out continued overnight. Cable snapped and the Japanese yen was the safe haven currency of choice. There wasn’t any fresh news, just carry-over risk aversion from the New York session. GBPUSD plunged from 1.3038 at yesterdays close to a low of 1.2796 in Asia. Sterling has since bounced, but not with any enthusiasm. The rally in yen caused officials from the Ministry of Finance to remind markets that will monitor JPY. No one care. Japanese equities slid and the Nikkei finished down 1.85%
In Europe, EURUSD rebounded from the Asia low of 1.1035 but the move stalled at 1.1077. EU ministers are reportedly planning to levy fines on Spain and Portugal for failing to adhere to EU budget deficit regulations. It isn’t clear how levying fines on the two nations helps with their financial woes. Perhaps the EU will lend them the money (at negative interest rates) to pay the fine.
WTI oil prices slid with the US dollar rally which helped drive USDCAD to resistance in the 1.3040-1.3060 area.
Canada’s Merchandise Trade deficit for May was virtually unchanged at 3.3 billion according to StatsCanada. USDCAD traders ignored the data. The Canadian dollar remains at the mercy of US dollar sentiment and oil prices and domestic data is a greatly diminished trading factor.
USDCAD technical outlook
The intraday USDCAD technicals are bullish while trading above 1.2970 looking for a break of resistance in the 1.3040-60 area to extend gains to 1.3110 and then 1.3150. A move below 1.2970 will lead back to 1.2930. Longer term, USDCAD is in an uptrend from the May low while trading above 1.2700 looking for a test of strong resistance in the 1.3180-1.32000 area.
For today, USDCAD support is at 1.2970 and 1.2940. Resistance is at 1.3060, 1.3090 and 1.3120
Today’s Range 1.2970-1.30060
Chart: 4 hours