Canadian Dollar Update December 20, 2019 – Canadian Dollar awaiting Retail Sales report
USD/CAD Open: 1.3125-1.3126, Overnight Range: 1.3118-1.3181
Oil is at $60.35 and gold is at $1,483.90. US markets are higher today.
The short-term USD/CAD technicals are neutral-bearish. For today, USD resistance is at 1.3195. Support is at 1.3133.
The Canadian dollar traded with a slight negative bias overnight. Yesterday, USDCAD tested support in the 1.3100-05 area, which held. Prices subsequently drifted higher to revisit the resistance level of 1.3140, which is where they found themselves in early Toronto trading. The Canadian dollar may retest support again this morning if October Retail Sales data rises above the 0.5% forecast. The data is expected to be robust due to strong auto sales.
Today marks the last full week of trading for the European and North American FX markets, and trading activity is expected to be light as it was overnight. The US dollar opened in Toronto on a mixed note. It recorded small losses against the Australian dollar and British pound, inching higher against the rest of the G-10 majors. The Swiss franc and Japanese yen opened unchanged.
USDJPY drifted in a narrow 109.27-109.39 range even after a higher than expected inflation report. The National Consumer Price Index rose 0.5%, in November, well above the 0.2% that was forecast. However, the news was largely ignored following the unchanged Bank of Japan monetary policy meeting, earlier this week. USDJPY is also supported by the rally in US Treasury yields since last Friday.
The Australian and New Zealand dollars drifted aimlessly inside narrow bands with most desks already in holiday mode.
The British pound continued its trend of being the most active currency in overnight markets. GBPUSD bounced about in a 1.3009-1.3046 range. Better than expected UK GDP data lifted prices off the floor, but gains were capped ahead of the UK parliament vote on Boris Johnson’s Brexit plan. Q3 GDP rose 0.4% q/q compared to forecasts for a 0.3% rise, supported by a 0.5% y/y increase in Q3 Total Business Investment.
EURUSD drifted lower overnight and broke minor intraday support at 1.1115 which suggests further losses to 1.1050. There were not any specific catalysts for the move, although the selling of EURGBP played a role.
Oil prices continue to consolidate recent gains. Prices have slipped from their overnight peak but are well above where they opened on Monday. West Texas Intermediate (WTI) continues to be underpinned by the OPEC production cuts and the improved outlook for global growth following the US/China trade deal.
US Michigan Consumer Sentiment Index and PCE-Price Index reports are ahead.
Today’s Suggested Range USD/CAD: 1.3080 – 1.3180