China released a series of better-than expected economic reports that were viewed with a jaundiced eye by traders. China Q2 GDP rose to 6.9 % a tick higher than the 6.8% that was expected. Industrial Production was a robust 7.6%, well-above the 8.5% that was forecast.
However, the quality of the data is questionable as it is coming just before a possible leadership shuffle at the Communist Party Congress, in the fall, a meeting that occurs only once every 5 years.
Another reason for the muted reaction to the China data was the Marine Day holiday in Japan. That helped to confine USDJPY in a 112.41-112.76 range.
AUDUSD bounced within a 0.7804-34 range. NZDUSD peaked at 0.7359 early and dropped to 0.7318
AUDUSD inched higher throughout the overnight session, supported by improved risk sentiment. NZDUSD traded sideways and then eased lower in early New York trading. Ranges for both currency pairs were narrow.
EURUSD ignored Eurozone inflation data as it was expected. Traders are a looking ahead to the European Central Bank meeting on Thursday.
Sterling failed to extend Friday’s gains but remained firm in a 1.3069-1.3111 range. Theresa May’s Tory party appears to have some dissent. A leaked memo suggests France favours a “hard” Brexit.
Oil prices stayed firm. WTI chopped around between $46.41-$46.86/barrel, helped by Friday’s rig count report. The rig count only rose by three, suggesting US drilling activity may be slowing.
USDCAD consolidated Friday’s gains but stayed under pressure due to firm oil prices, a hawkish Bank of Canada, and increased concerns that the Fed will delay the next rate increase.
It will be a quiet trading session today. There isn’t any US or Canadian data to cause a stir leaving traders looking elsewhere for guidance. Many will be at their favourite golf course or sitting on a patio.
|17-Jul-17||Open-6 am EDT||High||Low|
USDCAD Technical outlook:
The USDCAD technicals are bearish looking for further losses to 1.2465. However, the size of the move since last week, argues for a bit of consolidation in a 1.2640-1.2740 range. Coincidently, Friday’s USDCAD drop halted at 1.2638, the 50% Fibonacci retracement level of the 2014-2016 range on the weekly chart A decisive break of this level targets the 61.8% level of 1.2150
For today, USDCAD support is at 1.2640 and 1.2610. Resistance is at 1.2690 and 1.2720.
Today’s Range 1.2640-1.2690
Chart: USDCAD Weekly
Author: Agility Forex
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