Overnight Range 1.3190-1.3234
USDCAD dropped to 1.3156 from 1.3185 immediately following the release of this morning’s US data and then rebounded back to 1.3212.
The -0.3% drop in Retail Sales was a tad wors than expected as was the 0.0% PPI reading. However, Jobless claims were strong and the Philadelphia Fed index rose to 12.8 in September. Taken together, the data doesn’t provide any additional clarity as to the Feds intentions for next week’s FOMC meeting.
The Canadian dollar is still suffering from the effects of the Energy Information Administration Crude Stocks change report yesterday. The initial spike following the headline of a small decline (0.559 million barrels) quickly faded. Traders focused on the jump in Distillate fuel inventories and sent WTI crashing from $45.12 to $43.21 overnight. The WTI intraday downtrend is intact while prices are below 44.60 which will continue to support USDCAD.
In Asia, AUDUSD consolidated within a 0.7440-0.7490 range and did not suffer any lasting effects from a weaker than expected employment report. Australia lost 3,900 jobs in August while the forecast was for a gain of 15,000. Weaker than expected GDP data undermined NZDUSD which dropped to 0.7243 from 0.7300. USDJPY traded erratically within a 101.90-102.60 range with traders concerned about the BoJ’s intentions for next week’s policy meeting.
The Bank of England policy meeting was the main event during the European session. The BoE left rates unchanged while the minutes were mildly positive about the economy. GBPUSD churned within a 1.3200-40 range around the news. Eurozone CPI data (Aug. 0.1% vs forecast 0.1%) failed to have an impact on EURUSD.
General US dollar sentiment and oil price movement will continue to dictate USDCAD direction for the rest of the week.
USDCAD technical outlook.
USDCAD technicals are bullish supported by the break of resistance at 1.3150 and while trading above 1.3180 which is the bottom of the steep uptrend line from Thursday’s 1.2852 low. A topside break of resistance in the 1.3240-80 area would hang a target on 1.3450. A break below 1.3150 would extend losses back to 1.3080. For today, USDCAD support is at 1.3150 and 1.3110. Resistance is at 1.3240, 1.3260 and 1.3290.
Today’s Range 1.3150-1.3240