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We Could do With A Little Less Drama From The White House

Categories: AUD, CAD, EUR, GBP, Markets, News, USD

Senate Majority Leader Mitch McConnell’s comment about “White House drama,” after the uproar about President Trump leaking classified information to the Russians, was ignored.

President Trump is under attack (again) for reportedly asking the ex-FBI Director Comey to end the inquiry into Michael Flynn, Trump’s first pick for National Security Advisor.

Arguably, the US dollar sell-off because of Washington politics’ is a tad overdone.  The move is occurring in an absence of FOMC members talking about interest rates and the economy while some softer than expected US economic data getting more attention than is warranted.

Nevertheless, the US dollar continued to be sold against Europe and Yen while weaker commodity prices undermined the commodity currency bloc.

USDJPY was a victim of the Trump hysteria. It was offered from the open in Asia and declined steadily falling from 113.12 to 112.25 in early New York trading.

AUDUSD see-sawed inside its recent range due to a combination of soft commodity prices and profit taking while ignoring positive economic data.

NZDUSD rallied in Asia, supported by the earlier GlobalDairyTrade auction results but the move was not sustained

EURUSD continues to move higher thanks to the drama surrounding President Trump, rising anticipation for ECB tapering and a drop in US rate hike expectations. Eurozone CPI was as forecast at 0.4$ for April.

Sterling was choppy. GBPUSD climbed from 1.2912 to 1.2940 in Asia and then dropped to 1.2906 in Europe after the UK jobs data. It quickly recovered and traded at 1.2954 in early New York trading.

Oil prices recovered from yesterday’s drop which was worsened when API reported a 0.882 million/barrel increase in US inventories. News that Iran may back a longer-term Opec production cut boosted WTI from $48.06 to $48.95 in New York.

The rally in oil prices led to USDCAD testing support in the 1.3570-80 area, which held

Those looking for US dollar direction from economic data, won’t find it today. The data calendar is very light. However, for USDCAD traders, it may be a different story.  The weekly EIA Crude Oil Stocks change report is due at 10:30 am (EDT) and if the forecast for a 2.283 million barrel decline is accurate, WTI prices will head toward $50.00/b and USDCAD will probe support at 1.3570. Canadian Manufacturing shipments, (tier 3 data) could provide an added incentive to sell USDCAD if the forecast of a 1.0% gain in March shipments is accurate.

Overnight Ranges

Open 6:00 am EDT 17-May-17 High Low
USDCAD 1.3615 1.3627 1.3581
EURUSD 1.1095 1.1121 1.1080
USDJPY 112.35 113.12 112.26
GBPUSD 1.2945 1.2950 1.2906
USDCHF 0.9837 0.9860 0.9822
AUDUSD 0.7400 0.7441 0.7392
NZDUSD 0.6887 0.6925 0.6882
USDMXN 18.7115 18.7470 18.6305
WTI   48.55 48.55 48.06

 

USDCAD Technical outlook:

The intraday USDCAD technicals are bearish while prices are below 1.3640 looking for a break of support at 1.3570 to extend losses to 1.3400 as suggested by the descending triangle shown on the chart. However, 1.3570 is also the base of the uptrend line from the April low.  A break above 1.3660 would negate the downside pressure and argue for additional 1.3580-1.3740 range trading.  For today, USDCAD support is at 1.3605, 1.3570 and 1. 3530.  Resistance is at 1.3630, 1.3670 and 1.3705

Today’s Range 1.3570-1.3660

Chart: USDCAD 4 hour

usdcad-4-hour-chart

 

Agility Forex Author: Agility Forex

Agility Forex is a Canadian cross-border payment specialist. They are Canadian owned, operated out of Vancouver and are registered with Fintrac, the Canadian government agency that oversees the money transfer industry. They specialize in all things Canadian Dollar and aim to provide the best service and best pricing on all Loonie cross rates. Visit Agility Forex.

You can get in touch with AgilityForex via email here or via the contact page.

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