Sideways trading was the norm for the rest of the G-7 currencies overnight. Janet Yellen’s Congressional testimony did not satisfy hawks or doves while the EU/Greek buffer deal has put that crisis on the back burner. Even Russia threatening to cut off Ukraine gas supplies on Friday hasn’t raised much of a stink.
The rather uneventful overnight session has turned rather robust with data and Fed comments sparking renewed US dollar demand. US Durable goods (2.8%) were much higher than expected while core CPI mitigated deflation fears. EURUSD broke support at 1.1300 and is sitting at 1.1250 with 1.1000 in sight.
USDCAD has gone for a wild roller coaster ride. After having a peek at support at 1.2390 in Asia, it edged up to 1.2470 prior to the Canadian CPI release. Traders appeared confused with the data. The headline said CPI rose 1.0% in January (yoy) and they sold USDCAD. The monthly data noted a 0.2% decline and then the bought USDCAD, helped by bullish US data. Meanwhile, core CPI was unchanged.
USDCAD technical Outlook
The intraday USDCAD technicals are mixed. The bounce from 1.2390 and subsequent break above 1.2460 argues for further gains to 1.2550. On the other hand, the drop below support 1.2550 keeps the focus on 1.2340-60. The reality is that USDCAD is directionless within the context of the 1.2350-1.2550 range.
Today’s Range 1.2440-1.2510