Loonieviews 19Aug16

Aussie and US dollar losers for the week

USDCAD Open (6:00 am) 1.2823-27 Overnight Range 1.2775-1.2846 19Aug.16


(Change since Monday 6:00 am to Friday 6:00 am)

NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from 6:00 am EDT, 15Aug16 to 6:00 am EDT, 19Aug16

The US dollar is starting the New York session up on the day but down on the week against the G10 currencies with the exception being the Australian dollar. AUDUSD came under added pressure overnight with the report that Moody’s had downgraded their outlook on 4 major Australian Banks, in part due to price rigging investigations. USDJPY rallied throughout the Asia session on and then started to drop in early European trading.

EURUSD dipsy-doodled in a 1.1300-65 range in thin trading. German PPI data was the only economic news and no one really cared. Sterling traded in a similar fashion. The GBPUSD range was 1.3110-80. Today’s price action was mostly due to profit taking after a week of solid US dollar losses. Traders are fixated on the US rate outlook and thanks to a variety of FX speakers and this week’s FOMC minutes, more confused than ever.

The oil price rally took a bit of a breather overnight with WTI dropping from $48.71 to $47.91. It has since bounced back to $48.17 and is well above Monday’s low of $44.35/b and provided support to the Canadian dollar.

USDCAD traders deal with Retail Sales and CPI data this morning. It is likely to be a mixed result. CPI may be weaker than expected while Retail Sales may surprise to the upside. However, as USDCAD is tracking US dollar moves against the majors as well as oil prices, the domestic data is unlikely to have any lasting impact.

USDCAD technical outlook.

The intraday USDCAD technicals are bearish while trading below 1.2850 and looking for a move below 1.2800 to extend losses to 1.2760. A break above 1.2860 would lead to a retest of 1.2910 and then 1.2950. Longer term, failure to recover above 1.3000 will keep the focus on support in the 1.2500 area. For today, USDCAD support is at 1.2790 and 1.2750. Resistance is at 1.2850, and 1.2910.

Today’s Range 1.2760-1.2860

Categories FX, Foreign Exchange, Currency, Canadian Dollar

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