CAD traders await Cdn Retail Sales & CPI data
Summary
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USDCAD: Dollar/CAD found some support in the 1.2880s yesterday and rallied back above the 1.2900 level after EURUSD receded further from its daily high, but the market couldn’t get much momentum going to the upside because EURUSD eventually bounced back up. Overnight price action has been muted as traders await an important Canadian data set: July Retail Sales (expected +0.4% MoM, +0.6% ex Autos) and August CPI (expected +2.8% YoY, -0.1% MoM). Expect a spike higher into the 1.3010-25 level should we get weak numbers. We have 1blnUSD in options expiring at the 1.3000 level today. Expect further pressure on the entrenched fund long position should we get strong numbers. Next supports are 1.2870s, then 1.2820s. Expect choppy price action around 1.2900-1.2950 should we get mixed results. November crude oil sits between 70.10 support and 71.50 resistance at this hour. This weekend's event risk for oil traders is the Algiers summit on Sunday. More here.
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EURUSD: Euro/dollar traders managed to keep the current uptrend in tact yesterday after some broad based USD buying into the London close was met by buyers at trend-line support in the 1.1750s. The market closed NY trading at its session highs, meanwhile USDCNH closed near its lows (below support at 6.84 we might add). This technical pattern allowed for further EUR strength overnight, which we saw into early European trade, but then we got lackluster French, German and Eurozone PMI data for September, along with some negative Brexit developments, and the mood as soured a bit since. The EM FX space has also broadly turned lower on the day.
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GBPUSD: Sterling is getting hammered this morning as it appears the Salzburg summit was a disaster for the UK’s Theresa May. More here. Rumors circulated earlier today that May was going to make a big announcement, but this was later denied. GBPUSD has now given back most of yesterday’s gains and hovers around Wednesday’s highs ahead of the NY open. Futures open interest changes showed some position liquidation yesterday, but not as much as one might have expected given the move. We think this shows how resolved the fund short position is. We think the 1.3150 level will be the key to watch today. Hold and we might see some short covering, but break below and the shorts will regain the momentum in their favor. We’re just getting word now that Theresa May is expected to make a statement on Brexit at 8:45amET this morning.
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AUDUSD: The Aussie, like CAD, isn’t doing much today, but the market continues to inch higher and now sits comfortably above trend-line resistance in the 0.7260s. Copper is up strongly today (+1.9%), but it has run into some resistance here at the 2.80 mark. USDCNH has regained its composure here a bit and looks like it might want to regain the 6.84s. December gold is well off its overnight high. All of this kind of leaves a mixed picture for AUDUSD going into the weekend, but we think the bulls are still in charge near term above the 0.7260s. Next resistance is 0.7320. S&P raised the outlook on Australia’s AAA credit rating to stable from negative today.
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USDJPY: Dollar/yen resumed it rally yesterday; driven by another rip higher in US stocks and broad USD buying into the London close which vaulted the market back above support in the 112.20s. The NY close was quite positive (another bullish outside day…2nd one this week), and this allowed for further gains in Asian trade overnight. US equity futures have pared their overnight gains now however, leading to some USDJPY selling, but the market is still holding above yesterday’s NY highs (which is positive).
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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.