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USDCAD consolidating losses. Broad USD moves+crude oil leading. Busy calender today with US CPI, DOEs, FOMC Minutes, mounting Syria tension.

CXI April 11th, 2018


  • USDCAD: Sellers continued to hammer USDCAD yesterday.  The technical weakness on the charts and the China-led ease of trade tensions wasn’t a great set up to begin with, but then we saw the EURUSD break higher again (on hawkish comments from the ECB’s Nowotny) and AUDUSD break above 0.7740.   Combine this broad USD selling with a monstrous rally in crude oil prices and USDCAD made quick work of the support levels at 1.2660 and 1.2625-40.  The NY close was anything but pretty, and it opens the door for a move lower into the 1.25s (next support 1.2550-60, then 1.2480s), but markets are consolidating price action for the time being ahead of US CPI at 8:30amET.  Mario Draghi just finished speaking in Frankfurt, but he didn’t say anything notable for markets and didn’t touch on Nowotny’s comments from yesterday.  After US CPI, traders will be watching crude oil’s response to the DOE weekly inventory report (10:30amET), and then the broad USD’s reaction to the FOMC Minutes from the Mar 21 Fed meeting (2pmET) and rising geopolitical tensions regarding Syria.  Chart resistance today for USDCAD is 1.2625-40, then 1.2660 (yesterday’s support levels).  While we think USDCAD could take a stab at testing these resistance levels today given the event risk with all the scheduled headlines, we also have to be mindful of the fact that EURUSD, AUDUSD and crude oil prices are still not showing signs of technical weakness (ie. if these markets rally further, it will naturally pressure USDCAD).  Canadian dollar futures traders added 1230 contracts in new positions yesterday.

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Erik Bregar

Erik Bregar - Director, FX Trading

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