USDCAD Overnight Range 1.2690-1.2745
This morning’s higher US Jobless claims data (297k vs. forecast of 285K) and modestly better Canadian Housing data (which is expected in June) has taken the wind out of the sails for recent USDCAD bulls. The break of intraday support at 1.2690 sets up a test of 1.2660 support which we may see today.
USDCAD traded in a fairly narrow range overnight. In Asia, it hovered around the New York close (1.2730) but that wasn’t the case in early European trading. USDCAD headed lower to just below 1.2700 before bouncing, in part due to the rebound in China equity markets.
It was a fairly active session overnight, beginning in Asia. The much-better-than-expected Australian employment data gave AUDUSD a brief boost prior to renewed weakness in Chinese equity markets, crushing that rally. The China CSI 300 dropped initially and then quickly reversed, posting a 5.7% gain on the day. There may have been some “official” support for the rally but no one is saying.
European traders took their cue from the Asian markets and sold US dollars, helping to drive EURUSD to 1.1125. That momentum didn’t last. A number of ECB officials sounded pessimistic on Greece developments and the earlier gains were erased.
Yesterday’s release of the FOMC minutes proved to be a non-event although some tried to make a doveish case because the Committee acknowledged risks from China and Greece. It would have bee news if they didn’t acknowledge the risks.
The intraday technicals are modestly bearish following the failure to extend gains above the 1.2750-70 area todays move below 1.2690 likely to extend to the 1.2640-60 area. A break below 1.2640 would indicate that a short term top is in place at 1.2760 and suggest further downside to 1.2530. A move above 1.2780 will extend gains to the 1.2820-50 zone.
Today’s Range 1.2660-1.2730
Chart: USDCAD 30 minute with break of uptrend shown Larger Chart