Loonie rides oil rumour wave
USDCAD Open (6:00 am) 1.3157-61 Overnight Range 1.3138-1.3221 19 Sept 16
NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00pm) to Sept. 19, 6:00 am EDT
USDCAD started the week under pressure. The Venezuelan Oil Minister said that Opec/Non-Opec members were close to an agreement to stabilize markets. Those remarks were validated when the Opec Secretary General said that Opec may convene and extraordinary meeting if a consensus was reached in Algiers. WTI Rallied from $43.10/b to $43.90/b, a rather tepid move that suggests traders are skeptical of the news. Still USDCAD dropped from 1.3221 to 1.3138 on the news.
It was a slow start to the week. In Asia, Japan was closed for a holiday and there wasn’t any economic data of note from any region to provide direction. It got a little better in Europe when the commodity currency bloc started rallying on the Opec story. EURUSD never recovered from Friday’s US CPI induced sell-off. News that Angela Markel’s “grand coalition” lost a key vote in Berlin didn’t have any impact.
Global equity indices and US equity futures are higher, in part due to sober second thought that Friday’s CPI data would not lead to a Fed rate hike in September. New York commuters will be a tad more alert this morning after the bomb blast and failed bomb in the city on the weekend and the supposed ISIS inspired stabbings in a Minnesota Mall.
There isn’t any data of note in the US or Canada today leaving oil price movements and stock markets to provide USDCAD direction.
USDCAD technical outlook.
The intraday USDCAD technicals turned bearish with the move below 1.3180 which snapped the uptrend line from September 8. However the move will merely be a correction if support in the 1.3110-30 area holds. A move below 1.3110 would lead to 1.3030 and then the 1.2990-1.3110 “pivot zone. Longer term, the USDCAD uptrend from May 2016 remains intact while prices are above 1.2800. Resistance in the 1.3250-1.3300 area has contained all top-side probes since March 2016. For today, USDCAD support is at 1.3130, 1.3110 and 1.3080. Resistance is at 1.3170, 1.3190 and 1.3230.
Today’s Range 1.3110-1.3210