GBPUSD opened at 1.3118 and quickly plummetted to 1.3123 thanks to a headline proclaiming “Brexit Talls Deadlocked.” Traders were starting to get a little concerned during the European session after. GBPUSD climbed in Asia on broad US dollar weakness.
This morning’s US data was a tad better than expected which gave the greenback a bit of a lift.
Canada New Housing Price Index missed the mark. The combination of weak domestic data and better than expected US data underpinned USDCAD. Overnight, USDCAD consolidated yesterday’s post FOMC minutes losses, trading with a negative bias following the break of key support at .1.2540 and 1.2490. President Trump said that he would be in favour of a bilateral trade deal if the Nafta negotiations fail.
The post-FOMC minutes US dollar bleeding has stopped, at least for the time being. The greenback was sold across the board after the release of the minutes, and the sell-off continued in Asia and early European trading.
Traders were spooked by the FOMC members perplexion with low inflation concluding that future rate hikes could be at risk.
The US dollar opened in New York with very modest gains against the majors, except for the antipodean currencies, compared to yesterdays close,
EURUSD traded with a bullish bias, rising higher in Asia and only retreating in European trading after bumping into resistance at 1.1880. Eurozone August Industrial Production was better than expected. (Actual 1.4% vs forecast 0.5%, m/m) Prices inched lower in New York trading
USDCHF firmed as Spain/Catalonia risks subsided, for now and extended those gains in New York.
USDJPY bounced in a narrow 112.21-112.51 range. Japanese election polls predict that PM Abe will keep his job.
AUDUSD and NZDUSD rallied on the broad US dollar weakness with Aussie getting an added boost from a higher reading for Consumer Inflation Expectations.
WTI oil prices tumbled from $51/32at the end of yesterday when API reported a 3.09 million barrel increase in US crude inventories. WTI did not recover and is currently trading at $50.72
FX markets could be exposed to fresh volatility from the IMF/World Bank meetings today. They include a speech by ECB President Draghi and other ECB officials.
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish. The break of the uptrend line at 1.2500 followed by the move below 1.2460 target 1.2410 and then 1.2350. A move above 1.2510 would negate the bearish outlook and suggest some 1.2430-1.2550 consolidation. For today, USDCAD resistance is at 1.2480 and 1.2505. Support is at 1.2440 and 1.2405.
Today’s Range 1.2440-1.2505
Chart: USDCAD hourly