USDCAD Overnight Range 1.2660-1.2720 March 20, 2015
USDCAD is probing resistance at 1.2720 following a mixed set of data. Retail Sales declined a worse-than-expected 1.7% in January which was not entirely unexpected, mostly due to lower gasoline prices. CPI rose 1.0%, y/y while Core CPI gained 2.1%, bang on consensus. At the same time, EURUSD punched above 1.0710 suggesting that the post data USDCAD gains will be short-lived as the Loonie will be buoyed by general US dollar weakness.
Spring has sprung and FX traders appear to have stopped to smell the roses. Asian markets were rather subdued, ignoring a speech by the Reserve Bank of Australia governor and remarks by his counterpart at the Bank of Japan. Obviously, the post FOMC volatility has taken a toll, leaving traders to re-evaluate their broad FX outlook. The European session wasn’t any better. The never-ending Greek debt renegotiation saga provided the back drop for EURUSD trading which kept to a narrow range.
The Federal Reserve’s Lockhart and Evans both give speeches this afternoon which could have an impact on markets. However, it is more likely that trading fades to a whimper due to fatigue from the Wednesday/Thursday volatility.
USDCAD technical Outlook
USDCAD is trading erratically within a broad 1.2550-1.2750 range. The intraday technicals are bearish while trading below 1.2720 looking for a break of support at 1.2670 to extend losses to 1.2610 and then 1.2550. A break above 1.2750 leads to a test of resistance at 1.2780 and then 1.2620-40.
Today’s Range 1.2610-1.2710