July 15, 2019
USDCAD open (6:00 am EDT) Overnight Range: 1.3023-1.3041
The US dollar closed out last week with losses across the board against the G-10 major currency pairs, led by a 1.20% rise in NZDUSD. Fed Chair Powell’s dovish testimony saying “many FOMC participants saw that a case for a somewhat more accommodative monetary policy had strengthened” all but confirmed a July 31st rate cut.
The Asia session was quiet due to a lack of Antipodean economic data and holidays in Japan. That changed just before the European open after the release of a barrage of Chinese data. AUDUSD and NZDUSD popped after China Q2 GDP rose 1.6%, better than than the forecast for a 1.5% gain. Also, Retail Sales rose 9.8% in June compared to the 8.6% rise in May.
In Europe, the dovish Powell’s testimony and modestly bullish intraday technicals continued to underpin EURUSD although prices stayed inside a very narrow 1.1265-83 range. The Eurozone has enough issues, including the prospect of further ECB monetary policy easing to limit topside moves.
GBPUSD is consolidating gains after bouncing off support in the 1.2440-50 area. Nevertheless, the US Tory leadership race and elevated risks from a no-deal Brexit cap the upside.
Oil prices are steady. WTI oil inched down from Friday’s peak of $60.72/barrel and is trading in New York at $60.45. The better-than-expected China data have helped underpin prices as are the lingering effects from Tropical Storm Barry.
USDCAD continues to consolidate losses under 1.3050. The intraday sentiment is negative, although support in the 1.2990-1.3000 area is formidable. Traders are awaiting Canada CPI data on Wednesday and Friday’s Retail Sales report to provide direction.
There are any US or Canadian economic reports today suggesting commodity and equity price movements will lead FX direction.
USDCAD Technical Outlook
There is no change to the technical outlook from Friday. The intraday USDCAD technicals are bearish while prices are below 1.3040 . However, downside is heavily supported in the 1.2990-1.3000 area with additional support lurking at 1.2960. A break of 1.2960 targets 1.2625. A break above 1.3050 would extend gains to 1.3090 and 1.3120.
Today’s Range 1.2990-1.3050
Chart: USDCAD daily
Source: Saxo Bank