• Financial Institutions
  • Corporations
  • Travelers
  • SOLUTIONS
  • Foreign Bank Note Exchange
  • International Drafts
  • International Wire Transfers
  • Global EFT
  • Foreign Check Clearing
  • Foreign Draft Issuance
  • INDUSTRIES
  • Travel
  • Technology Companies
  • Payroll
  • Healthcare
  • Nonprofit
  • Partnerships

USDCAD jittery amidst trade headlines. Market back near highs on massive EURCAD buying. Canadian GDP on deck at 8:30am.

CXI March 2nd, 2018

Summary

  • USDCAD: It was a volatile day yesterday for USDCAD.  At first we saw upward momentum fail just shy of the key 1.2870 resistance level despite stronger than expected US ISM figures.  Combine that with some less hawkish comments from the Fed’s Powell around the 10am hour and a rebound in EURUSD and traders had their reason to sell USDCAD back down to support in the 1.2820s.  Support held, and then Trump announced new steel tariffs (as expected) around mid-day.  The knee jerk reaction was for the market to bid up USDCAD again, this time past 1.2870, because it was negative news for Canadian trade on the surface.  However, when negative reactions from Canadian and European officials started hitting the wires about a hour later, the USD quickly reversed lower against EUR and CAD.  The move back lower in USDCAD saw traders attacking support at 1.2825 going into the NY close, and we had a confirmed failure of the 1.2870 level on the daily candlestick chart (all negatives for USDCAD going into overnight trade).  USDCAD, however, was resilient for most of the Asian and early European session, and it’s actually rebounding even further at this hour on massive EURCAD cross buying and Trump’s “trade wars are good tweet”.  It’s not clear what’s fundamentally driving the EURCAD surge at this hour, but we would note that the cross is technically “breaking out” on its chart and there’s not much resistance until the low 1.59s.  USDCAD has regained the 1.2870s as we finish typing and we now have the Canadian Dec GDP figures at 8:30amET.  Markets are expecting +3.4% YoY.  We think the 1.2870 level will be pivotal again over the next hour.  Should Canadian GDP disappoint, we would expect the market to build upon gains.  Should GDP surprise to the upside, we’ll likely see 1.2870 fail again and the 1.2820s attacked again on the downside.

     

Tune in @EBCTradeDesk for more real-time market coverage.

 

Market Analysis Charts

USD/CAD Chart

EUR/CAD Chart

GBP/CAD Chart

Charts: TWS Workspace


About the Author

Erik Bregar

Erik Bregar - Director, FX Trading

linkedin twitter

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact Us or call EBC's trading desk directly at 1-888-729-9716.


About Exchange Bank of Canada
Exchange Bank of Canada (EBC) is a Schedule 1 bank based in Toronto, Canada. EBC specializes in foreign exchange services and international payments providing a wide range of services to financial institutions and corporations, including banknote foreign currency exchange, travelers' cheques, foreign currency cheque clearing, foreign currency bank drafts, Global EFT and international wire transfers through the use of EBC's innovative EBCFX web-based FX software www.ebcfx.com.

Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.

This publication has been prepared by Exchange Bank of Canada for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Exchange Bank of Canada, its affiliates or any of their employees incur any responsibility. Neither Exchange Bank of Canada nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Exchange Bank of Canada products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Exchange Bank of Canada.