USDCAD Overnight Range 1.2307-1.2377
The Greek PM cries referendum, the Eurozone Finance ministers cry no extension and Greek citizens just cry. News that the Greek government implemented capital controls and shuttered banks until July 7th spooked FX markets in early Asian trading. A bout of risk aversion in a thin market saw EURUSD plunge to 1.0955 from Friday’s close at 1.1170. USDJPY also gapped lower, dropping to 122.20 from 123.80. EURUSD recovered almost all of its losses in Europe while USDJPY has not.
Lost in the tossed salad that was Greek, was news of a 0.25 bp rate cut in China. The one year benchmark deposit rate is now 2.00% while the lending rate fell to 4.85%.
USDCAD has been trading water since the start of trading in New York. An initial foray towards resistance in the 1.2390-05 area failed in part due to an improvement in domestic data. The May Industrial Product Price Index came in at 0.5%, as expected but way better than the previous month’s decline of 0.9%. The Raw Materials Price Index rose 4.4% vs.4.0% the previous month. It also helped that the US dollar strength seen overnight, abated somewhat.
Looking ahead until tomorrow, Greece issues and the risk of default plus the expiry of the Iran nuclear talks will keep fingers on the trigger for risk aversion trades while month end portfolio flows will make for choppy FX markets.
USDCAD technical outlook
The intraday USDCAD technicals are bullish while trading above 1.2310 and attempting to test resistance at 1.2395-1.2405 which represents the downtrend line from the June peak. A move above here will set up a test of the 1.2450-60 March peak, downtrend line. For today, USD support is at 1.2340, 1.2305 and 1.2280. Resistance is at 1.2390, 1.2420 and 1.2450.
Today’s Range 1.2320-1.2405
Chart: USDCAD daily with moving averages