• 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 sold as sense of calm returns to markets broadly. AUD selling leads broad USD rebound overnight. Trade figures out shortly and jobs reports out tomorrow.

CXI April 5th, 2018

Summary

  • USDCAD: Dollar/CAD had another tough session yesterday.  The market extended a little bit higher after the NY open but those gains fizzled just shy of trend-line resistance at 1.2850 and this also coincided with a positive open for US stocks.  We then saw crude oil recoup its daily losses after a larger than expected draw in the weekly DOE inventory report.  This helped CAD and risk sentiment overall.  Stocks continued higher as a sense of calm returned to markets, and the USD started to see selling pressure across the board.  USDCAD then took out chart support at 1.2815, and this opened the door for a retest of the recent lows, which the market did very easily as a massive short covering rally ensued for stocks in the afternoon.  The NY close was negative in that we closed right at the 1.2770 support level.  This allowed for traders to push the market a little lower at the start of Asian trade, but USDCAD finally caught a bid when AUDUSD failed at 0.7725 (trend-line resistance).  The Aussie has been on the back foot ever since.  Europe has stepped in and bought USD broadly today against EUR, GBP and JPY.  All this is helping USDCAD inch back above the 1.2770 support level, but there’s not much momentum behind it at this hour.  Next up are the February Trade Balance figures for both the US and Canada (8:30amET).  While not normally huge market movers, these releases might get closer scrutiny considering there’s nothing else on the calendar today.  Canadian dollar futures traders liquidated 2668 contracts during yesterday’s USDCAD sell off.  The CAD crosses are not looking too hot this morning with EURCAD failing to regain the 1.57s and GBPCAD breaking decisively below 1.8000.  We think USDCAD retains a range-bound to bid tone here however, so long as the 1.2760-70s hold.  Should support break, traders will be focused on the next meaningful support level (1.2720).  Resistance today is 1.2815, then 1.2850.  Tomorrow will be a big day for USDCAD traders as we’ll get the March employment reports for both the US and Canada.

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

 

Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

EUR/CAD Daily Chart

GBP/CAD Daily 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.