“It’s a gas, gas, gas.” Apple (AAPL: Nasdaq) announced a cut to its quarterly revenue forecast just as New York traders were leaving for the day, on Wednesday. It was Thursday morning in Asia and only Australia and New Zealand traders were at their desks. Japan was closed. Then there was an “oops.” It is unclear if it was a “fat-finger” or “rogue algorithm”, but within seconds, USDJPY plunged from 108.88 to 104.92, AUDUSD dropped from 0.6984 to 0.6692 and NZDUSD fell from 0.6655 to 0.6593. GBPUSD joined the panic, dropping from 1.2610 to 1.2413. Prices reversed quickly, and within an hour USDJPY was trading at 107.83, AUDUSD at 0.6934, NZDUSD touched 0.6640 and GBPUSD was at 1.2553. The G-10 majors traded nervously for the rest of the overnight session, and the US dollar opened in New York on a mixed note.
EURUSD dropped following the Apple news, but the drop was rather modest compared to the “big-figure losses elsewhere.
The Apple news put global equity markets on the defensive. European bourses are deep in the red and US equity futures point to a nasty, negative open for Wall Street. Traders are also disheartened by the US government shutdown and content to await Friday’s employment data.
Oil prices have been consolidating last months losses in a choppy $42.40/b-$48.65/b band with traders still concerned about rising supply in a slowing demand environment.
USDCAD dropped alongside a spike in oil prices which occurred during the “flash crash.” Those losses were reversed, and prices drifted higher.
US Weekly Jobless Claims and the ADP Employment change report (forecast 178,00) are due today. FX liquidity is still lower than usual due to extended Christmas holidays. The Fed validity of the recent dovish flip by the FOMC will be put to the test tomorrow with the release of nonfarm payrolls for December.
USDCAD Technical Outlook
The USDCAD technicals are bullish, and unchanged from yesterday. Prices are consolidating gains since the beginning of December in a 1.3560-1.3660 band. A topside break would target 1.3795 while a break of 1.3560 targets 1.3480. for today, USDCAD support is at 1.3590 and 1.3560. Resistance is at 1.3630 and 1.3660. Today’s range 1.3590-1.3660