Oil erased most of its morning losses after the release of the weekly oil inventory data, it seems that the USDCAD has followed in tandem so far. The U.S. gasoline numbers fell the most since May of this year, however the crude data seems to have offset the gasoline numbers a bit.
The USDCAD has come off its weaker numbers, but analysts are now turning more negative longer term on the CAD. The currency did trade through 1.3220 however it was unable to stay at higher levels due to the drop in gasoline inventories.
If it goes through again, then expect resistance at 1.3264 and 1.3280.
XE Market Analysis: North America – Jul 18, 2018
USD-CAD has gained for a second day, posting a three-week high at 1.3242, which is a little north of the midway point of the range that’s been seen over the last month. Fed chair Powell yesterday gave an upbeat view of the U.S. economy, which join the recent heavy declines in oil prices in forming a cocktail of bullish narratives for USD-CAD. We look for a revisit of the June highs at 1.3384-87. The pair has support at 1.3146-68.
EUR-USD descended to a two-week low at 1.1607, extending the dollar-driven decline that was prompted by the upbeat remarks on the U.S. economy from Fed chair Powell yesterday. We have been, and remain, bearish of EUR-USD, based on strong U.S. economic growth and the Fed’s tightening course, while any move from Trump to follow-through on hits threats to tariff car imports — which he looks to be gearing up for, describing the EU as a “foe” last weekend — would presumably be negative for the Euro relative to the Dollar. Former EUR-USD support at 1.1695-1.1700 now reverts as resistance. The July-2 low at 1.1591 provides the a downside waypoint.
EUR-CHF has settled back in the mid 1.1600s, down from the eight-week high seen earlier in the week at 1.1714. SNB’s Maechler said late last month that the Franc “remains highly valued” despite the depreciation seen over the last year, arguing that “we are in extraordinary times and we are using unconventional measures.” The commáents affirm that the SNB is firmly on hold, with Maechler admitting that the SNB’s monetary policy room for manoeuvre is “necessarily” affected by the actions of ECB and Fed.