USDCAD Overnight Range 1.3187-1.3265        

The US dollar plunged following the worse-than-expected nonfarm payrolls report.The Canadian dollar rallied but only for a nanosecond. A steep plunge in WTI prices (from $45.25 to $44.20/barrel) took the bloom off the rose and USDCAD rallied to above where it was, pre-data.

The NFP report was ugly. Not only did job gains miss forecasts but Hourly Wage Earnings declined as well. And, to rub salt in the wound the July and August NFP gains were revised lower. Yesterday, Richmond Federal Reserve president, Jeffry Lacker’s said that an October rate hike was still possible. He has probably changed his tune.

The Canadian dollar may suffer due to renewed fears that today’s payrolls data confirms the idea that the global slowdown is impacting US growth which suggests reduced demand for oil prices. At the same time, Canada gets a slew of important data next week, including Merchandise Trade, PMI, Housing Starts and employment.  Any evidence of a rebounding Canadian economy should limit USDCAD gains.

The overnight session was typical of a pre-NFP release day.  Regional data releases had a short lived impact Australian Retail Sales gave AUDUSD a boost even though it was as expected. The gains were mostly erased in Europe. Elsewhere, Cable caught a bid on better than expected Markit/CIPS construction PMI and like AUDUSD, the gains were not sustained.

 USDCAD technical outlook

USDCAD technicals are bullish following this morning’s dip to the 61.8% Fibonacci retracement level of the September range, and subsequent bounce. The intraday downtrend was snapped on the move back above 1.3220 which suggests further gains to 1.3280. If you ignore the spike low from the June FOMC spike lower, the USDCAD uptrend remains intact while trading above 1.3150.  For today, USDCAD support is at 1.3210 and 1.3180.  Resistance is at 1.3260 and 1.3280

Today’s Range 1.3180-1.3260

 Chart USDCAD 30 minute