Slow start to noisy week
USDCAD Open (6:00 am) 1.3193-97 Overnight Range 1.3151-1.3198 26 Sept 16
NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00 pm) to Sept. 26, 6:00 am EDT
USDCAD is starting the Monday session a tad firmer compared to Friday’s close, on the back of widening Canada and US interest rate spreads due to the prospect of higher American rates and the risk (still low) of a Bank of Canada rate cut. Oil price Jitters have also contributed to the uncertainty with traders leery of “tape bombs” from the Opec meeting in Algiers, that is in full swing.
In Asia, NZDUSD dipped on a weaker than expected Trade report. The move didn’t last and NZDUSD bounced within a 0.7220-0.7250 range. A narrow range was the story for AUDUSD as well. USDJPY weakened, rallied and then weakened again in a choppy 100.30-101.15 range. USDJPY was sold despite a speech from BoJ Governor Kuroda promising to do everything to get inflation on track.
EURUSD traded in a narrow range. The single currency recouped all of its Asia losses and more during the European session supported by broad improvement in the German IFO survey. The overall reading was 109.5 vs. forecast of 106.2. GBPUSD slipped on a soft mortgage report and the usual Brexit implication chatter.
Later today, the European Central Bank’s, Mario Draghi and Ewald Nowontny will be giving speeches. Elsewhere, the first US presidential debate takes place between Hillary the Prevaricator and Donald the Trump.
The risk that oil prices could drop if Opec doesn’t reach a production cap agreement combined with Donald Trump, the repealer of NAFTA, surging in the polls after tonight’s debate will keep USDCAD bid and the focus on 1.3250. Bank of Canada Governor Poloz could undermine the Loonie with his speech today especially if he highlights inflation risks.
USDCAD technical outlook.
USDCAD technicals are bullish. The uptrend from the September low of 1.2822 remains intact while prices are above 1.3020 and Friday’s break above 1.3150 has renewed the focus on the 1.3250 resistance zone. A break above the 1.3250-80 area will extend gains to 1.3450. A break below 1.3120 warns of a dip to 1.3050. for today, USDCAD support is at 1.3150, 1.3120 and 1.3080. Resistance is at 1.3210, 1.3250 and 1.3280
Today’s Range 1.3140-1.3240