USDCAD Overnight Range 1.2667-1.2740
USDCAD drifted lower following the employment report which was pretty much as expected, posting a loss of 6,800 jobs. However the US dollar has since roared back with a vengeance, touching 1.2750 at the time of writing. The volatility of this data has diminished its impact on the currency. For domestic traders the focus is next Wednesday’s Bank of Canada interest rate decision. A ¼ point rate cut is now widely expected but it is debateable as to whether a cut is reflected in the current price.
Meanwhile, the rest of the world is focused on two major areas-China and Greece. Chinese equity markets posted another robust gain overnight following new government initiatives but with barely 50% of the listed equities even trading the validity of the rally is questionable.
Greece submitted new debt negotiation proposals to the EU sparking a rash of high level meetings this weekend. France is very optimistic for a successful result, perhaps because they helped to draft the documents and more so because the Greek proposals are very similar to the last EU proposal.
The intraday rally from the beginning of July remains intact while trading above 1.2660. A break of resistance in the 1.2750-70 area will extend gains to 1.2820. A move below 1.2660 would lead to 1.2630 and then 1.2610. A break of 1.2610 would imply a short term top is in place in the 1.2750 area and argue for additional 1.2430-1.2730 consolidation.
Today’s Range 1.2690-1.2760
Chart USDCAD daily with support and resistance