Tuesday, April 21, 2015

VBCE Daily Foreign Exchange Update for Tuesday, April 21st, 2015


 

USDCAD spot rate: 1.2270  - 1.2275 (as at 8:00am PST)
 
Range:
Asia
1.2225 to 1.2272
Europe
1.2241 to 1.2281
North America
1.2212 to 1.2297
 
Technical Support / Resistance:
 


S1

S2

R1

R2

1.2090

1.2180

1.2280

1.2350

 
Key Economic Data Releases:
  -Canada wholesale sales: -0.4% (exp. 0.0%)
 
Key Event Calendar:


Date

Canada

U.S.A.

Apr. 22
 
Apr. 23
 
Apr. 24

 

Existing home sales, crude oil stock change

Jobless claims, Markit mfg., new home sales

Durable goods orders
 

Yesterday, USDCAD traded from 1.2230 down to 1.2180 before climbing to 1.2260. The move up was short-lived with USDCAD falling back to 1.2190 as oil broke above $57 after a quick dip below $55. Also, Bank of Canada Governor Poloz re-iterated the Bank’s decision last week to uphold a neutral bias and not cut interest rates further. The change in the Bank of Canada’s tone last week surprised markets and lead to one of the largest one-week rallies the CAD has ever seen (USDCAD declined by 5.5 cents).  The move below 1.22 was short-lived and USDCAD climbed to hold near 1.2230 for the balance of the session. Overnight, USDCAD tested 1.2280 resistance during the London session before falling back to 1.2212 in early North American trading. The pairing then briefly broke above 1.2280 extending gains to 1.2297. Trade above the 1.2280 level could not be sustained and USDCAD fell back to 1.2250. Another move higher to break 1.2280 failed to materialize and the pairing has since eased to 1.2255. After holding a 1.2350 1.2835 range for much of the first quarter of 2015, the market appears to have shifted its sentiment towards USDCAD from bullish to  bearish.  The  main catalysts were  the  Bank  of Canada affirming a neutral interest rate policy, higher oil, and recent weaker U.S. data suggesting that U.S. rate hikes may be fewer and far between. Previous strong support at 1.2350 should cap rallies in USDCAD for a test of 1.20 this quarter. Currently, the TSX and the DJIA are down 0.43% and 0.29% respectively. EURCAD is up 0.40% trading between 1.3059 and 1.3187. GBPCAD is up 0.60%, trading between 1.8180 and 1.8326. JPYCAD is up 0.12% trading between 0.01023 and 0.01027. Gold is up 0.23% trading between $1,193 and $1,203USD/oz., silver is up 0.15% trading between $15.92 and $16.20USD/oz., while oil is 1% trading between $57.19 and $58.04.
 
Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive


 

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