Overnight Range 1.3143-1.3187
The Loonie is a little battered and bruised but appears to have survived the barrage of bad news economic reports released on Friday and it is sitting well within its three-month 1.2650-1.3250 trading band.
Friday’s Canadian employment data was ugly, posting a loss of 35,500 jobs. However, after sleeping on it, markets have come to realize that it was exactly one year ago that StatsCanada released a wonky employment report and then had to re-issue it. The Canadian jobs data is unreliable and the USDCAD reaction suggests that the move is more of a “tradition” rather than a belief that it is an economic indicator. The US employment data has some believing that a September rate hike is a possibility. Snow in September is also a possibility, but highly unlikely, at least in Vancouver
Overnight, weak China trade data was mostly ignored with Aussie and Kiwi posting gains against the US dollar. USDJPY extended Friday’s post payrolls gains and opened in New York at the overnight high. GBPUSD consolidated Friday’s losses while EURUSD traded sideways.
Oil prices are higher supported by talk of an OPEC conference in Algiers in September and by comments by the Opec President predicting higher crude prices in the “latter part of 2016”. With only four months left in the year, “the latter part of 2016” is rather close.
There isn’t much in the way of data leaving FX direction to be steered by equity markets and WTI. Global equity indices are all in the green and NY equity futures point to a higher open.
USDCAD technical outlook.
Bearish while trading below 1.3190 looking for a break below 1.3150 to extend losses all the way back to the post-employment data low of 1.3010. A break above 1.3190 suggests another test of resistance in the 1.3240-60 area is likely.
For today, USDCAD support is at 1.3140, 1.3120 and 1.3080. Resistance is at 1.3180, 1.3220 and 1.3260
Today’s Range 1.3120-1.3190
Chart: USDCAD 4 hour