USDCAD Open 1.1238-43 Overnight Range 1.1225-1.1260
The USDCAD is starting the day on shaky ground. AUDUSD and NZDUSD rallied on mostly better (but 2nd tier) China data, a lower fix in CNY and an upsurge in the Shanghai Composite index. The loonie, initially move higher but quickly shed gains ahead of today’s Canada Feb. CPI report (Forecast 0.9%m/m; Core 0.5%m/m) and Jan. Retail Sales (Forecast 0.7% m/m). CPI is the key. FX traders have taken the BoC governor’s Tuesday remarks as a signal that rate cuts were on the agenda, despite his insistence that neutral is neutral. If today’s CPI beats expectations, 1.1150 will be tested. There is no US data.
The USDCAD technical are bullish but intraday, there are signs of stress suggesting that the steep uptrend intact since Tuesday is vulnerable to a correction. The move through the steep uptrend line at 1.1245 and the failure of hourly support at 1.1230 to hold suggests further USDCAD weakness is likely. For today, USD support is at 1.1220, 1.1180 and 1.1150. Resistance is at 1.1260,1.1280 and 1.1320
Today’s Range 1.1160-1.1250