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Canadian Dollar Trading Range Narrows Further is a Break Out Direction Looming?

CAD - Canadian Dollar

The Canadian dollar continued its tight trading range yesterday, and overnight only moving in a sixteen basis point range from 1.33 - 1.3316. Canadian Wholesale Sales numbers in September rose by 1.0% from August much better than the 0.4% expected, the loonie reacted minimally testing 1.3285 at the time the report was released. No economic data is released today; the loonie will be subject to the ebb and flows of market participants.
WTI crude oil moves higher in trading to start the week from 57.22 to the current price of 58.13 a barrel. Optimism in the US-China trade saga with the introduction of Phase One seemingly imminent is also pushing gold lower over the past four trading sessions. Hopes of the deal between the two trading Titans rose after China said it was stepping up police intelligence efforts to combat IP theft. Intellectual Property (IP) has been a central focal point in the trade war treaty, so China’s efforts to step up security in this area is seen as a significant hurdle to overcome for a resolution.
The Canadian dollar finds support at the psychological 1.33 and 1.3274 the 200-day moving average, while resistance is at 1.3333 or on the inverse the 0.75 cents US level. A break above or below the resistance or support levels could give the lonnie legs in its next direction.

Key Movers

A quiet night in the U.S. session overall for currency pairs, with the U.S. Dollar Index climbing higher on the back of reports that China is planning to raise penalties on intellectual property violations. Other than that, headlines were light with China summoning the U.S. Ambassador to complain about the recent Hong Kong bill passed through the senate (yet to be signed officially by Trump). Market reaction to the downside was limited on the headline with U.S. equities outperforming and U.S. Treasury yields dipping.

Earlier on in the Europe Session, EURUSD continues to disappoint bulls and bears, with the French and German PMI’s a beat (although from deficient levels), but the Eurozone services a miss. This saw price action briefly rally and reach the highs on the day, with the rally topping out at 1.1030, sitting now at 1.1017. The 1.0990, for now, remains short term support, and if we close below 1.1000 on the break of it, we may see further follow through on a USD flow drive month-end pricing.
New ECB president Christine Lagarde spoke at the end of last week, with nothing market moving, and we have more speakers this week form the ECB’s Philip lane, Yves Mersch, Benoît Coeure as well as U.S. Fed’s Chairmen Jerome Powell and Lael Brainard.

Expected Ranges

USD/CAD: 1.3300 - 1.3316 ▼

EUR/CAD: 1.4639 - 1.4675 ▲

GBP/CAD: 1.7106 - 1.7179 ▼

AUD/CAD: 0.9006 - 0.9044 ▲

NZD/CAD: 0.8522 - 0.8552 ▲