USDCAD testing trend-line support again. AUDUSD and crude oil leading. Another quiet session ahead for data.

Summary

• USDCAD: Dollar/CAD wandered around for most of the NY session yesterday as AUDUSD, EURUSD and oil prices traded in tight ranges.  The news flow was light and nothing notable was said by the central bank speakers we noted yesterday.  It could be more of the same today as the data calendar is light again.  We have some second tier releases out shortly (Canadian Existing Home Sales at 9amET and US University of Michigan survey at 10amET) and some more Fed speak (Rosengren at 8am, Bullard at 9am, and Kaplan at 1pm).  Technically speaking, the USDCAD downtrend remains intact at this hour.  AUDUSD broke chart resistance at 0.7775 overnight and this has allowed USDCAD to dribble lower once again.  Trend-line support in the 1.2550s was tested in the 6am hour and has held so far.  We’re starting to see some broad USD buying after the 7am hour, and a quick 70c drop in crude oil around the same time, which is also helping USDCAD here.  The CAD crosses are mixed once again and therefore not providing clues for USDCAD today (EURCAD breaking down through trend-line support in the 1.5480s but GBPCAD holds the 1.79s).  We think USDCAD takes its cue to today from how AUDUSD responds to the new resistance level it’s currently dealing with (0.7800-0.7815) and how crude oil traders want to position themselves ahead of a weekend that is sure to have geopolitical risk.  May crude oil has rejected trend-line resistance at 67.70, but it’s still trading well above trend-line support in the 66.30s.  Canadian dollar futures traders added 3920 contracts in new positions yesterday.

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Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

EUR/CAD Daily Chart

GBP/CAD Daily Chart

AUD/USD Daily Chart

May Crude Oil Daily

Charts: TWS Workspace

About the Author

Erik Bregar - Director, FX Trading

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.

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