USDCAD Overnight Range 1.2223-1.2323
The US dollar is Mr.Toad and it has been on a wild ride this morning. Another bout of weak US economic data (Jobless Claims rose, Housing Starts and Building Permits fell) revered hard won US dollar gains in Europe. USDCAD which had scraped back above 1.2310 prior to the data plunged and is now 1.2228, below the overnight low. The break of major support at 1.2330 combined with a re-evaluation of the Canadian economic landscape and the prospect of higher oil prices have triggered a wholesale bail-out of stale Long USDCAD positions.
The overnight session was entertaining. AUDUSD took over where Canada left off in a lively Asian session. Short AUDUSD traders scrambled to cover positions when Australia announced a whopping 37,700 jobs increase and a drop in the unemployment rate to 6.1% from 6.3% and AUDUSD soared. Kiwi followed AUDUSD higher. USDJPY traders saw the carnage in AUDUSD and USDCAD and sold dollars as well. In Europe, EURUSD traders bought dollars and then reversed course just ahead of the New York opening. The US dollar has been offered ever since.
USDCAD technical outlook
The intraday USDCAD technicals are bearish while trading below 1.2270 with the break of the overnight low at 1.2257 pointing to further losses toward 1.2050. Only a move back above 1.2360 would negate the short term downside pressure. For today, USDCAD support is at 1.2220 and 1.2180. Resistance is at 1.2280 and 1.2310