The Nafta talks resume in Washington this morning.  The threat of 25% tariffs on cars hangs like the Sword of Damocles over the Canadian negotiating team.  They have to decide whether changing their position of no concessions on dairy to protect their Quebec franchise is worth alienating Ontario and the rest of the country.

The US dollar opened in New York mostly unchanged against the major G-10 currencies although the Japanese yen and the Antipodean currencies are a tad softer.  There weren’t any new developments in the US/China trade war front leaving regional economic data releases to guide traders.

AUDUSD dropped to 0.7090 in Asia after a weak Business Confidence survey which showed a drop to 4 July from 7 in June.  Bottom pickers and profit takers lifted prices to 0.7127 in Europe, but they were overwhelmed by new selling and AUDUSD dropped to 0.7105 where it opened in New York. NZDUSD tracked AUDUSD moves but in a smaller range.

USDJPY was bid to start the Asia session, rising from 111.07 to 111.55 in Europe, supported by rising US Treasury yields and a lack of US/China trade drama.

EURUSD was choppy, rallying from 1.1578  in Asia to 1.1643 in Europe and then retracing the entire move by the time New York opened.  The drop occurred even after German and Eurozone ZEW data was better than forecast.  Eurozone employment was higher as well.

UK employment data helped power GBPUSD from 1.3018 in Asia to 1.3085 when the numbers were posted.  Average hourly earnings rose 2.6%, ex-bonus 2.9%.  Price action was volatile around the numbers, and GBPUSD opened in New York at 1.3037.

USDCAD traded sideways while tracking broad US dollar moves.  USDCAD losses are limited by concerns that the US/Canada talks fail while gains are capped by hopes the discussions are a success.  A hawkish Bank of Canada outlook is reinforcing the topside.

Canada Housing Starts data for August are released this morning, (forecast 210,300) while the US offers up the JOLTS survey.  Nafta headlines  will dictate USDCAD direction

USDCAD Technical Outlook

The longer term USDCAD technicals are bullish but the intraday technicals are undecided.  USDCAD is consolidating in a 1.3120-1.3190 range with a break either side yielding .0100 points.  Direction is determined by Nafta sound bites.  For today, USDCAD is supported at 1.3130 and 1.3080.  Resistance is at 1.3180 and 1.3210.

Today’s Range 1.3080-1.3180