Loonie slides on broad USD strength
USDCAD Open 1.1355-59 Overnight Range 1.1322-62
It was a lively overnight FX session with the US dollar gaining across the G-10 board, in part because Monday’s sell-off may have been a tad overdone ahead of the ECB meeting on Thursday and the NFP report on Friday. A recovery in global equity markets and talk that the WTI plunge had found a floor contributed to the rally. Meanwhile the RBA left rates unchanged as universally expected.
Yesterday’s Canadian dollar rally on the back of a bounce in WTI prices looks a tad dubious. On Friday, the world was awash in oil with WTI below production costs for most Canadian and US producers. On Monday, all was forgiven as perhaps their isn’t as much oil as previously thought? Bogus!. I’m guessing the WTI bounce was merely a profit taking bounce and that the dominant downtrend will re-emerge and with it, a higher USDCAD.
USDCAD technical outlook
The intraday USDCAD technicals are bullish while trading above 1.1330 but need to overcome resistance in the 1.1350-60 area to extend gains to 1.1390. A move above 1.1390 points to 1.1440. On the downside, a break of 1.1330 risks 1.1310 and then 1.1290
Today’s Range: 1.1.1330-1.1390