USDCAD Overnight Range 1.2668-1.2715
The FX markets are far from a lullaby today. The EUR is getting pounded by the US dollar while the Loonie and the rest of the G-10 get splattered by the fall-out.Widening yield differentials between the US and the Eurozone (German bunds have negative yields out to 7 years) are a key factor behind today’s move.
The story in Asia wasn’t much different.The US dollar was bid. In addition to the yield differential issues, US dollar demand surged after a series of soft economic reports from Australia (Consumer confidence, Home Loans) and weak Chinese data (Industrial Production, Retail Sales). USDJPY is also moving higher, touching 121.60.
The outlook for the Canadian dollar is rapidly deteriorating as even the most stubborn technical resistance areas wilt under the relentless US dollar demand. Traders have hung a target on 1.3050 and they are drawing their bows.
There is virtually no US (or Canadian) data releases today leaving market direction dependent on oil price movements and headlines. Later on, the RBNZ rate decision will provide early fireworks in Asia
USDCAD technical Outlook
The intraday USDCAD technicals are bullish following the overnight break of 1.2690 and 1.2700 opening the door to further gains to 1.3050, although resistance at 1.2800 will be problematic. For today, USDCAD support is at 1.2680 and 1.2660. Resistance is at 1.2720 and 1.2750.
Range for balance of the day 1.2680-1.2750