Oil spills are messy and this latest bout of WTI price declines is no different. The 5.3 percent fall in WTI prices between Monday and Tuesday, talk of a “bear” market and rampant scepticism that Opec production cuts can offset rising production elsewhere are behind the move.
Tuesday’s, end of day, API Weekly Crude stocks change data showed a 2.72 million barrels drop in US crude inventories which helped to “stop the bleeding. WTI traded in a $43.05 $43.58 range overnight and started the New York session at $43.45.
Soft oil prices and lower US Treasury yields put USDJPY on the defensive. Prices edged lower from 111.48 and opened in New York at 111.08.
Weak oil prices and yesterday’s lower than expected GlobalDairyTrade auction drove NZDUSD to 0.7218 from 0.7248 The entire decline was erased in European trading. AUDUSD traded in a similar fashion.
NZDUSD rallied in concert with Aussie, rising from 0.7221 to 0.7265.
EURUSD traded in a very tight .0020 point range overnight. The tug of war between a doveish Draghi and a hawkish Fed and lack of top tier economic data have left traders scratching heir heads.
Sterling stopped falling after yesterday’s BoE Governor Mark Carney comment that it was “too soon” to hike UK rates. Today, traders are focused on the Queen’s Speech, where UK PM May outlines her governments new legislative plans. GBPUSD traded in a 1.2590-1.2634 range and is back at the day’s high.
The oil price drop contributed to broad equity market indices weakness. The major Asia and European bourses are in the red, as are New York futures.
USDCAD has performed admirably in the face of oil price weakness. That may be due, in part , to the overhang of speculative long USDCAD positions. Those traders may be hoping to trim their holdings on USDCAD strength which if true, would limit the topside.
US existing Home Sales data is due this morning but it will likely be overshadowed by the EIA weekly Crude stocks change report. Traders are looking for US crude inventories to decline 2.1 million barrels.. GBPUSD will be vulnerable to the reaction to the Queen’s speech.
|21-Jun-17||Open-6 am EDT||High||Low|
USDCAD Technical outlook:
USDCAD is modestly bid inside the post-BoC policy shift range of 1.3165-1.3310. A break above 1.3310 would extend gains to 1.3380 which is guarding the downtrend line from May 4 which comes into play at 1.3470.. For today, USDCAD support is at 1.3240 and 1.3190. Resistance is at 1.3310 and 1.3380
Today’s Range 1.3240-1.3310
Chart: USDCAD 4 hour
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