USDCAD Overnight Range 1.2990-1.3050    

USDCAD tracked the other commodity currencies lower on the back of a surge in oil prices which touched $49.71/barrel overnight. Kiwi also continued yesterday’s New York rally following the higher than expected GlobalDairyAuction results.

Kermit the Frog complained about how it “Wasn’t easy being green” and today some traders are whining about how hard it is to be bullish.  It seems like someone shouted “Risk on” and all that was bad about the world economy, disappeared.  It hasn’t.

China, the source of much of the global economic angst, didn’t suddenly recovery.  They went on holidays and are still not back. Out of sight, out of mind.  Oil prices have risen on hot air and a drop in crude inventories reported by API.

San Francisco Fed president Williams repeated his call for a 2015 rate hike but it was a case of seen that, heard that and it was ignored.

In Japan, the BoJ left rates and policy unchanged but didn’t say enough to close the door on additional stimulus this year.

This morning’s worse-than-expected Canadian Building Permits data (Actual -3.7% vs. forecast of a gain of 0.8%) didn’t have much of an impact on the Loonie. USDCAD will continue to track WTI prices today and remains vulnerable as long as the risk-on sentiment prevails. Tomorrows’ return of China from holidays and the release of the FOMC minutes may dampen trading enthusiasm today.

USDCAD technical outlook      

The intraday USDCAD technicals are bearish following the break of the uptrend from June which came into play at 1.3130. The steep drop has made short work of support in the 1.3020-60 area and now has the major 1.2950-1.3000 resistance area in its sights. A break of this level opens up a drop to 1.2850. A move above 1.3060 would negate the downward pressure.  For today, USD support is at 1.2990, 1.2970 and 1.2950.  Resistance is at 1.3030 and 1.3060.

Today’s Range 1.2980-1.3050

Chart USDCAD daily with broken uptrend                    Larger Chart