The US dollar found the glow from yesterday’s strong Consumer Confidence report fade in overnight trading. The greenback opened in New York with small losses against Yen and the commodity currency bloc and tiny gains vs Euro, Sterling and Swiss
Sterling hogged the spotlight. Theresa May fired off a signed letter to the European Union formally invoking Article 50. GBPUSD extended Tuesday’s losses in Asia and dropped from 1.2461 to 1.2379. That move was reversed in its entirety in Europe.
USDJPY ticked higher in Asia trading, extending gains made earlier, in New York, as concerns over Trumps healthcare bill failure faded and US data highlighted a strong economy. The rally was capped at 111.31 and USDJPY dropped to 111.03 at the New York open.
EURUSD traded in a 1.0778-1.0825 range, inching higher in Asia and then back down in Europe. European equity indices are higher and the FTSE is unchanged
Oil traders ignored yesterday’s end of day American Petroleum Institute report of a 1.9-million-barrel increase in crude inventories. WTI rose from $48.31 to $48.82 as traders preferred to focus on a supply disruption from Libya and hopes that Opec extends production cuts.
USDCAD drifted lower in a narrow range. Losses were hampered by another doveish performance by Bank of Canada Governor Stephen Poloz. Yesterday, he continued to stress the risks to the domestic economy while downplaying strong economic reports.
FX traders will be hard pressed to find fresh information and insight today. The only economic reports due today are US Pending Home Sales and EIA Weekly Crude change data. FOMC policy comments will be covered by Federal Reserve Bank of Boston President Eric Rosengren and San Francisco President John Williams who will regale markets with their economic perspectives. That suggests we are in for some choppy trading inside narrow ranges today.
USDCAD Technical outlook:
The USDCAD technical picture is unchanged from Tuesday. They are bullish and looking for a break above 1.3405 to extend gains to 1.3535. A break below 1.3320 will lead down to the 1.3240-60 area. For today, USDCAD support is at 1.3420 and 1.3380. Resistance is at 1.3405 and 1.3430
Today’s Range 1.3320-1.3390
Chart: USDCAD 4 hour
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