Loonieviews 15Sep16


USDCAD Open (6:30 am) 1.3190-94 Overnight Range 1.3190-1.3234 15 Sept 16


NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00pm) to Sept. 14, 6:30 am EDT

The Canadian dollar is still suffering from the effects of the Energy Information Administration Crude Stocks change report yesterday. The initial spike following the headline of a small decline (0.559 million barrels) quickly faded. Traders focused on the jump in Distillate fuel inventories and sent WTI crashing from $45.12 to $43.21 overnight. The WTI intraday downtrend is intact while prices are below 44.60 which will continue to support USDCAD.

In Asia, AUDUSD consolidated within a 0.7440-0.7490 range and did not suffer any lasting effects from a weaker than expected employment report. Australia lost 3,900 jobs in August while the forecast was for a gain of 15,000. Weaker than expected GDP data undermined NZDUSD which dropped to 0.7243 from 0.7300. USDJPY traded erratically within a 101.90-102.60 range with traders concerned about the BoJ’s intentions for next week’s policy meeting.

The Bank of England policy meeting was the main event during the European session. The BoE left rates unchanged while the minutes were mildly positive about the economy. GBPUSD churned within a 1.3200-40 range around the news. Eurozone CPI data (Aug. 0.1% vs forecast 0.1%) failed to have an impact on EURUSD.

There is a lot of US data due today including Retail Sales, PPI and Jobless claims. A better-than-expected Retail Sales number (Forecast -0.1%) may lead to a more hawkish outlook for next week’s FOMC meeting and give the US dollar a boost.

USDCAD technical outlook.

USDCAD technicals are bullish supported by the break of resistance at 1.3150 and while trading above 1.3180 which is the bottom of the steep uptrend line from Thursday’s 1.2852 low. A topside break of resistance in the 1.3240-80 area would hang a target on 1.3450. A break below 1.3180 and then 1.3150 would extend losses back to 1.3080. For today, USDCAD support is at 1.3180, 1.3150 and 1.3110. Resistance is at 1.3240, 1.3260 and 1.3290.

Today’s Range 1.3160-1.3260

Categories FX, Foreign Exchange, Currency, Canadian Dollar

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