It was a largely uneventful day yesterday in the US as stock markets drifted lower, despite a nice bounce off the lows. While the USD failed to push higher with resistance above.
The big mover on the day was clearly oil as it fell away sharply as the Saudis appear ready to produce as much oil as is required. The run-up in prices this year has certainly hurt consumers at the petrol bowsers, but it is making it appealing for the producers.
We also saw a big build in API inventories which will heap the pressure on.
The main story of the day looks like it will be the BOC. They are widely expected to hike rates so the USD/CAD will be the one to watch today.
The USD Outlook
The DXY tested the resistance level at 96.20 and couldn’t find much of a bid. We’ve tested this level a number of times recently and again the sellers keep on stepping up.
As mentioned, 97.00 is my big level above, while if we do fall back away, I will be looking for a bounce off 95.50.
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