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Yellen on Deck

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

Fed Chair Janet Yellen testifies before Congress this morning.  The lead-up to this testimony has really put a damper on FX markets as traders stayed close to home, in case she delivers a fresh take on interest rates. Remember, the Bank of Canada decided to look past low inflation when they switched to a hawkish bias, last month.  Why not, the Fed?

Traders are gearing up for a busy session The Bank of Canada releases its interest rate decision, policy statement and the monetary Policy report at 10:00 am (EDT), followed by Governor Poloz’s press conference at 11:15 am (EDT)

At the same time the BoC policy statement is released, Fed Chair Yellen will begin her opening remarks to Congress.

EURUSD opened in New York close to where it closed which was well-below the overnight peak. EURUSD inched higher in Asia, rising from 1.1463 to 1.1488 and then retraced the move in Europe. Traders are looking past comments from various ECB officials in the past few days to downplay the onset of QE tapering while downgrading US rate hike expectations. Higher than expected Eurozone Industrial Production data gave added support.

USDJPY dropped from 113.95 to 113.32, as it was caught up in Trump Jr’s email kerfuffle. The move appears overdone as finding dirt on Hillary Clinton would be as easy as finding a liar in Washington.

Sterling traded in a narrow band in Asian and then dropped from 1.2854 to 1.2813 in early Europe.   Trading.  The move was erased when the UK posted a 43 year low in the unemployment rate (Actual 4.5%)

 Oil prices soared in early Asia trading after the American petroleum Institute announced an 8.13 million barrel drop in crude inventories.  WTI rose from $44.92 to $45.99 and opened at $45.78/b.

AUDUSD and NZDUSD inched higher, albeit in narrow ranges, supported by the broad dollar weakness. Aussie got added support from a rise in Australia Consumer Confidence.

USDCAD traded quietly, torn between demand from position squaring ahead of the BoC meeting and offers from rising crude prices.

 

The day doesn’t start until 10: am.  That’s when the Bank of Canada and Janet Yellen compete for attention. The BoC comments and data will have a bigger bang on USDCASD than Ms. Yellen. Once that is out of the way, traders will be looking ahead to Friday’s US data which includes Retail Sales, CPI, Michigan consumer confidence and Business Inventories.

 

Overnight Ranges

12-Jul-17 Open-6 am EDT High Low
USDCAD 1.2928 1.2928 1.2896
EURUSD 1.1454 1.1488 1.1443
USDJPY 113.43 113.95 113.32
GBPUSD 1.2857 1.2868 1.2813
USDCHF 0.9632 0.9643 0.9620
AUDUSD 0.7650 0.7662 0.7636
NZDUSD 0.7236 0.7241

0.7218

USDMXN 17.9150 17.9479 17.9031

WTI  

45.78 45.99 45.68

 USDCAD Technical outlook:

The USDCAD technicals are bearish.  USDCAD has a negative bias inside a down channel bound between 1.2700-1.3000.  A break below 1.2860 will set the stage for the next leg lower while a move above 1.2950 will extend gains to 1.3000.  For today, USDCAD support is at 1.2890, 1.2860 and 1.2810.  Resistance is at 1.2950, 1.2990 and 1.3030.

Today’s Range 1.2840-1.2940

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.

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