The wait for the Fed and BoJ continues
USDCAD Open (6:00 am) 1.3210-14 Overnight Range 1.3192-1.3232 20 Sept 16
NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00pm) to Sept. 20, 6:00 am EDTT
The dollar is the dog of the commodity currency bloc. It has fallen while Aussie and Kiwi have moved higher. USDCAD traded sideways in Asia and then a dip in WTI prices during the European session pushed it above 1.3200, albeit in thin market conditions.
The Reserve Bank of Australia minutes gave AUDUSD a boost in Asia. They re-affirmed that Australian interest rates are likely to remain steady at 1.5% but didn’t provide a whole lot of new information. NZDUSD followed AUDUSD higher. The Reserve Bank of New Zealand meeting is on Thursday and although they will express unhappiness with the level of NZDUSD, higher domestic interest rates vis a vis the rest of the G10, will keep Kiwi in demand. USDJPY traded in a tight range awaiting tomorrow’s Bank of Japan policy meeting. 60% of economists expect the BoJ to announce additional stimulus.
In Europe, EURUSD hugged a narrow trading band while GBPUSD drifted lower. There hasn’t been much in the way of news or economic data so traders are sitting on their keyboards until the FOMC meeting on Wednesday afternoon. Today’s US data calendar includes Housing Starts and building permits.
USDCAD is bid and poised to renew its assault on the 1.3250-1.3300 resistance area undermined by renewed concerns of oil over supply. Yesterday, the Venezuelan oil minister declared that oil production was 10% higher than global demand warranted. A break below $42.75 (61.8% Fibonacci retracement of August range) may lead to a retest of support at $39.20. If it occurs, that move would drive USDCASD above 1.3300.
USDCAD technical outlook.
The intraday USDCAD technicals are bullish while trading above 1.3170 looking for a break of resistance in the 1.3240-60 area to extend gains to 1.3300 and then 1.3400. There is additional resistance at 1.3254 which is the 200 day moving average. USDCAD has not been above this average since mid-March 2016. Only a move below 1.3120 would negate the upside pressure. For today, USDCAD support is at 1.3190, 1.3160 and 1.3120. Resistance is at 1.3240-60 and 1.3300.
Today’s Range 1.3190-1.3260