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Several U.S. and Canadian fundie catalysts makes the intraday rally in USD/CAD the one to watch for the session.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 10869.76 -0.56%
FTSE: 6808.83 -0.78%
S&P500: 2613.84 -0.09%
DJIA: 24173.14 -0.14%
US 10-yr 2.736% +0.007
Bund 10-YR 0.236% +0.013
UK 10-YR: 1.33% +0.02
JPN 10-YR: +0.008% +0.004
Oil: 51.57 -1.41%
Gold: 1290.70 +4.96%
Bitcoin: 3590.48 -0.58%
Etherium: 119.95 -1.93%

Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • BOE’s Carney and Woods speak in London at 3:00 pm GMT
  • Fed’s Quarles participates in discussion in New York at 3:45 pm GMT
  • Japan National core CPI y/y at 11:30 pm GMT

What to Watch: USD/CAD

USD/CAD 1-Hour Forex Chart
USD/CAD 1-Hour Forex Chart

Today, we’re looking at USD/CAD as we just got a few pieces of economic data that could keep volatility bid in both the U.S. dollar and the Canadian dollar.

Early in the morning U.S. session, we saw a better-than-expected read on the Philly Fed manufacturing index (17.0 actual vs. 9.5 forecast) and a decrease in unemployment claims to 213K versus 216K in the previous month. From Canada, the ADP Non-farm employment change came in weaker at a net loss of 13K jobs in December versus a 74K net gain in November. Weaker oil prices may also be supporting a break higher.

There was a bullish reaction to the data, and given the intraday uptrend, likely on the global risk-off sentiment we’re seeing today, a break above the 1.3300 handle is one to watch for the bulls. This could turn into a multi-session move if broad risk sentiment continues to lean towards risk-off. Let’s see if the market can sustain above 1.3300 first.

For the bears, it’s a tough argument to make until you get below the consolidation area we’ve seen over the last few trading sessions, where the bottom lies around the 1.3240 handle. It’ll take a return to risk-on sentiment (more central bank stimulus news?) and probably a rally in oil prices to see USD/CAD move down enough for a break in the next session or two.