USDCAD Overnight Range 1.2455-1.2560
Optimistic analysts looking for a better-than-expected US nonfarm payrolls report were rewarded this morning when NFP gained 280,000 jobs, far surpassing the 225,000 forecast. The US dollar soared against the G-10 currencies as today’s report, which included a gain in the important hourly earnings component (0.3%), keeps a September US rate hike on the table.
The Canadian employment data was even more impressive than the US data as it beat the forecast by a factor of 5, coming in with a gain of 58,000 jobs vs. expectations for a 10,000 gain. Unfortunately, the Canadian data suffers from some credibility/reliability issues and although USDCAD declined on the initial release, it quickly reversed itself and probed key resistance in the 1.2550-60 area.
The other important meeting today was in Vienna. Opec has announced that they will keep the current production target of 30 million barrels per day. That doesn’t mean that members will adhere to the limit, just that there is a reference level. The news, while not unexpected has allowed WTI to rebound from this morning’s low and may have provided a modicum of support to the Canadian dollar which has drifted away from this morning’s high. (Currently 1.2532).
Overnight, trading was subdued. FX traders have ignored the late yesterday headline that Greece has decided to defer today’s IMF payment until the end of the month. Greece has four IMF payments due in June which means another two of them will be deferred making June 30th a very important date for the Eurozone.
USDCAD technical outlook
The intraday USDCAD technicals are bullish while trading above 1.2475 with a break above 1.2560 extending gains to the 1.2600-20 zone. A break above this level targets 1.2820. A move below 1.2475 will send USDCAD down to 1.2410 and if that level breaks, to 1.2360.
The longer term technicals point out that USDCAD is in a steady uptrend while trading above 1.1980. The shorter term downtrend from March which is in the 1.2620 area is being tested. A failure to break above this zone will result in further 1.2000-1.2600 consolidation.
Today’s Range 1.2480-1.2560
Chart: USDCAD daily with support and resistance noted
