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FX Sleepwalks into Weekend

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

The US dollar opened in New York with tiny gains against Sterling and Aussie, a loss against Swissy and close to flat against Euro, Loonie, and Kiwi.

Fed Chair Janet Yellen’s “cautious” approach to further US rate hikes has traders looking to the ECB for direction. They aren’t getting from there, either. Nevertheless, the ECB will be announcing a QE tapering program at some point which has put a floor under EURUSD.

FX traders are looking to this morning’s US economic data for direction

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.

USDJPY rose in Asia, dropped in Europe, and opened in New York, unchanged

EURUSD drifted higher.  The Eurozone trade balance widened to €19.7 billion from €19.6 billion but no one cared.  Liquidity was reduced do to Bastille Day in France.

Oil prices extended gains from yesterday.  WTI rose to $46.42/b., a 5.8 percent gain since Monday’s opening level.  Traders are focusing on the IEA’s forecast for higher demand in Q@ while reducing estimates for non-oil production.  On the other hand, it could just be additional profit taking inside the $42.00/-$47.00/b range that has held moves for the past two weeks.

USDCAD was ignored overnight and stayed in a tight range. It has shed 1.4 percent of its value since Monday and appears to be consolidating before the next leg lower.

US Retail Sales, CPI, Capacity Utilization, Industrial Production, and Michigan Consumer Sentiment Index are on tap this morning.  The data may have a bigger impact than usual if it surprises to the upside.  A series of strong data reports led by a jump in inflation would lead to revised Fed rate hike expectations.  However, if the data is on the soft side, Ms. Yellen’s cautious approach will be endorsed and the US dollar will retreat.

Overnight Ranges

Open
14-Jul-17 Open-6 am EDT High Low
USDCAD 1.2742 1.2745 1.2724
EURUSD 1.1415 1.1423 1.1392
USDJPY 113.25 113.57 113.16
GBPUSD 1.2964 1.2967 1.2937
USDCHF 0.9700 0.9698 0.9660
AUDUSD 0.7759 0.7761 0.7728
NZDUSD 0.7316 0.7333 0.7315
USDMXN 17.6735 17.7089 17.6664
WTI   46.31 46.41 45.82

USDCAD Technical outlook:

The intraday USDCAD technicals are neutral inside a narrow 1.2720-70 trading range.  A break above 1.2770 would extend gains to 1.2830 while a move below 1.2720 would target 1.2680. The break of 1.2772, the 76.4% Fibonacci retracement level of the 2016-2017 range has hung a target on the 100% Fibonacci retracement level, of 1.2458.   For today, USDCAD support is at 1.2720 and 1.2660.  Resistance is at 1.2770 and 1.2820.

Today’s Range 1.2670-1.2770

Chart: USDCAD 1 hour

usdcad-1-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.

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