USDCAD Open (6:00 am EDT) 1.3314-17 Overnight Range 1.3303-1.3341
President “Sanctionman” Trump is threatening to use sanctions to block a Russia/Germany pipeline. Aside from the fact, that it is none of America’s or Trump’s business, markets are a tad concerned about Trump’s “bully-boy” tactics rather than traditional diplomatic negotiations.
Another gust of risk aversion blew through markets overnight after two oil tankers were attacked, in the Gulf of Oman. WTI oil prices, which had hit $50.74/barrel yesterday after EIA reported crude inventories rose 2.2 million barrels, spiked to $53.11 as European markets opened. Prices traded in a $52.23/b-$52.75/b range and opened in New York at $52.67/b. Middle East tensions are just another wrinkle in the ongoing supply/demand debate ahead of the Opec meeting at the end of the month.
EURUSD traded narrowly in a 1.1287-1.1302 range, and “as expected” Eurozone Industrial Production data for April was a non-factor. The Swiss National Bank left rates unchanged and said downside risks were due to the US/China trade dispute.
GBPUSD traded with a negative bias. Boris Johnson is the front-runner to replace Theresa May, and Prime Minister Boris is not viewed as a Sterling positive.
In Asia, AUDUSD got beat up despite favourable economic data. Consumer Inflation expectations were 3.3% as forecast. The Employment report was robust with 42,300 new jobs and an unchanged unemployment rate at 5.2%. However, the lack of discussion in the China/US trade dispute and ongoing rate cut fears weighed on the currency pair.
USDCAD drifted lower following the oil tanker attack but remained well above the 1.3250-1.3270 support zone. Traders are reluctant to get overly bearish USDCAD below 1.3270 due to increased risks that external influences will force the Bank of Canada to cut interest rates before the end of the year.
Today’s US data includes Jobless Claims and Import/Export Index, while Canada releases the New Housing Price Index.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while prices are below 1.3340, looking for a break of support in the 1.3250-80 area, to extend losses to 1.3110. A break above 1.3350 would target 1.3420. A break above 1.3420 would suggest another short term bottom is in place and shift the foucs to 1.3550. For today, USDCAD support is at 1.32800 and 1.3250. Resistance is at 1.3340 and 1.3380. Today’s Range 1.3280-1.3340
Chart: USDCAD 4 hour