It wasn’t quite a snooze fest in overnight markets but it was close. The US dollar opened in New York with tiny losses against the G10 currencies, inside of narrow trading bands.
China credit data was a tad firmer than expected but it didn’t have any impact.
Australia new motor vehicle sales were soft which undermined AUDUSD in Asia. The losses were recovered
In Japan, the quarterly Tankan Survey showed an improvement in Manufacturing Sentiment for the first time in six quarters. Local economists suggest the data points to a gradually improving economy. USDJPY dipped briefly on the news but quickly bounced back. The recovery was short lived and USDJPY was near the overnight low (114.89) in early New York trading.
EURUSD traded randomly within a .0055-point range (1.0610-65) while ignoring Euro-area data.
Sterling traded sideways in Asia and attempted a rally in the European session following a better than expected UKK employment report. It didn’t last. GBPUSD declined and opened in New York at the bottom of the narrow overnight range.
Oil prices never really recovered from Tuesday’s end of day API Crude stocks change report. API reported a 4.7-million-barrel build in US crude inventories. WTI dropped to $52.36 from $52.86. and then spent the overnight session drifting within a $52.06-$52.50 range.
The Canadian dollar has been resilient. USDCAD traders have ignored the intraday oil price gyrations and appear to be focused on a test of major support in the 1.3070-90 area
There is a lot of US data on tap this morning including Retail Sales, Producer Price Index, Capacity Utilization and Industrial Production, in addition to the weekly EIA Crude Oil Stocks report. If the reports are close to the forecasts, the impact on FX markets should be minimal. After that, the day will be a write-off until the FOMC statement and press conference, starting at 2:00 pm EDT.
FX Market Snapshot
Change in currency from close (4:00 pm EDT) to 6:00 am EDT
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish and in a steep downtrend channel that began at the end of November, coinciding with the Opec announcement and the rally in WTI. The top of the channel is in the 1.3150-60 area while the bottom is in the 1.3000-10 zone. However, significant resistance looms in the 1.3070-90 area, stemming from the 200-day moving average and uptrend line support from May. For today, USDCAD support is at 1.3090 and 1.3060. Resistance is at 1.3130 and 1.3160
Today’s Range 1.3060-1.3160
EURUSD has traded randomly inside a broad 1.0500-1.0860 range within the context of a medium-term downtrend from May which is intact while prices are below 1.1190. For today, a move above 1.0670 will target a retest of resistance in the 1.0800 area. A move below 1.0600 will lead back to 1.0500
Chart: EURUSD 4 hour
The USDJPY technicals are bullish but consolidating recent gains within a 114.70-115.50 range. A break above 115.50 would lead to a retest of 116.12 and then 117.72, the 76.4% Fibonacci retracement level of the 2016 range. A move below 114.70 suggests further downside to 114.00.
Chart: USDJPY 30 minute