The FX majors marked time inside well-defined ranges in a subdued overnight session. Activity was dampened by the looming ECB policy meeting on Thursday and the US employment report on Friday.
USDJPY couldn’t decide if it should be bid on US rate hike concerns or offered on North Korea sparked risk aversion fears. It chopped around in a 113.73-114.06 range.
The Australian dollar eked out a small gain following a fairly upbeat Reserve Bank of Australia policy statement. The RBA cited improving global economic conditions in a fairly upbeat assessment of the domestic economy.
The New Zealand dollar didn’t fare so well. NZDUSD declined on bearish technicals, US interest rate outlook and expectations for a weak GlobalDairyTrade Auction.
EURUSD traded sideways with traders sidelined ahead of Thursday’s ECB meeting but unable to sustain gains above 1.0600. Eurozone Q4 GDP was 1.7%, year over year, which was expected and a non-factor for traders.
GBPUSD was under pressure as Europe opened. GBPUSD declined from 1.2252 to 1.2184. Sterling traders were unhappy with a drop in Halifax House Prices in February (5.1%, 3 month, year over year) in addition to Brexit concerns.
Oil prices continue to meander within well-defined ranges, torn between an abundance of supply and hopes that Opec cuts will address the issue.
USDCAD traded in a narrow range and appears well supported due to a doveish Bank of Canada and rate hike expectations in the US.
US Trade data is due this morning and the deficit is expected to widen to $48.5 billion from $44.3 billion. Canadian Trade data is also released. A weak export component will support the Bank of Canada’s dovish outlook and support USDCAD. The Ivey PMI is expected to be 57.1, up from the previous 56.4. This volatile data series may be overlooked due to the BoC’s recent policy statement.
|Close 4:00 pm EDT-Open 6:00 am EDT|
USDCAD Technical outlook:
USDCAD is in a modest uptrend inside the 1.3360-1.3435 range that has been intact since March 2. A break above 1.3440 targets 1.3480 and then 1.3600. A move below 1.3360 will lead down to 1.3310 and then 1.3260. For today, USDCAD support is at 1.3360 and 1.3320. Resistance is at 1.3420, 1.3440 and 1.3480.
Today’s Range 1.3370-1.3340
Chart: USDCAD 1 hour
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