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Canadians are returning to work from what was for many, a very soggy Victoria Day long weekend.

EURUSD spiked higher on Monday after German chancellor Angela Merkel told some students in Berlin that a “too weak” euro was behind Germany’s large trade surplus. FX traders only heard “too weak Euro” and the single currency spiked to 1.1262 from 1.1164.

Some European bank analysts suggested that the comment was taken out of context. The market doesn’t appear to be buying into that theory, as EURUSD is hovering near the peak.

On Tuesday, Eurozone Manufacturing PMI (May Actual 57.0 vs. forecast 56.5) and the German IFO survey were above consensus and provided additional support to EURUSD.

Sterling was rocked by a terrorist attack in Manchester on Monday night which undercut GBPUSD.  Sterling was already under (slight) pressure after peaking at 1.3034 on Monday due to the Conservative party dropping in the polls. In addition, there was more bickering on the what the EU will charge the UK to leave the EU.

USDJPY traded sideways inside a 110.86-111.55 range due to bearish short term technicals and the on-going White House drama.

WTI Oil prices peaked on Monday on news that many Opec nations have agreed to the Russia Saudi plan to extend production cuts for nine months. WTI declined to $50.60/b on Tuesday, in part BECAUSE Iran has not agreed to the terms.

USDCAD traded with a negative bias in a narrow 1.3472-1.3534 range, benefitting from the oil price rally.

There is US data today in the form of Markit Manufacturing PMI, New Home Sales, and Richmond Fed Manufacturing Index, none of which will have much of an impact on FX markets. Traders will be content to wait until Wednesday to see what, if anything, the FOMC minutes from May 3 have to offer.

Overnight Ranges

Open Includes Mondays Range
23-May-17 Open-6 am EDT High Low
USDCAD 1.3477 1.3534 1.3472
EURUSD 1.1258 1.1265 1.1162
USDJPY 111.14 111.46 110.87
GBPUSD 1.2989 1.3040 1.2954
USDCHF 0.9706 0.9760 0.9696
AUDUSD 0.7497 0.7505 0.7455
NZDUSD 0.7034 0.7035 0.6916
USDMXN 18.6545 18.7088 18.5656
WTI   50.64 51.23 50.47

USDCAD Technical outlook:

The intraday USDCAD technicals are bearish while trading below 1.3510 looking for a break of 1.3440 to extend losses to 1.3410. A move above 1.3510 suggests another test of 1.3580.  For today, USDCAD support is at 1.3440 and 1.3410.  Resistance is at 1.3510, 1.3540 and 1.3580

Today’s Range 1.3410-1.3490

Chart: USDCAD daily

usdcad-daily-chart

Source: Saxo Bank

 

 

 

 

Further Reading

 

Coronavirus spread fears linger – USD strong – AUD at 11 year lows

This week the US Dollar was touching three-year highs when valued against a basket of major currencies. The greenback’s traditional role as one of the safe-haven currencies is helped by a domestic economy that is largely immune to the threats of the coronavirus.

Last update: 22 Feb, 2020

Coronavirus unnerves currency markets

The strong start to the year for “risk-on” currencies is already a distant memory.

Posted: 3 Feb, 2020

New Year Optimism Retreats on US/Iran Tension

The threat of a proxy war between the US and Iran in Iraq has pared back some of the recent gains of “risk-on” currencies.

Last update: 8 Jan, 2020

  

Posted to: News

 
 
Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.
 

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