July 10, 2028
USDCAD open: 1.4170, overnight range 1.4136-14176, close 1.4169
USDCAD traded lower in Asia on the back of reports that despite trying to blow up each other, Iran and the US, via intermediaries, trying to kickstart new ceasefire talks. Prices bounced into the NY open than dropped rapidly after the better-than-expected Canadian Labour Force Survey results.
Canada added 18,200 jobs in June (forecast 10,000 jobs and the unemployment rate dropped to 6.5% from 6.6%. Tit’s a good report but, alas, the BoC is more concerned about rising prices than jobs, despite its own inflation metrics sitting in the middle of its mandated target range.
WTI oil prices retreated from yesterday’s 75.84 peak to 71.18 overnight, before bouncing back to 71.95 today. Traders are hoping that Iran and US do not escalate hostilities any further. Ships are managing to make it through the Strait unharmed with Hormuz Strait monitor saying 34 have made the transit in the past 24 hours.
The are no US economic reports on tap today.
USDCAD Technical Outlook
The intraday USDCAD technicals are little changed from yesterday (and most of this week for that matter). They are mildly bearish below 1.4190 but the hourly RSI has climbed above its moving average, suggesting downside momentum is fading. A decisive break below 1.4130 targets 1.4100, while a move back above 1.4190 shifts the focus to 1.4230.
The longer-term outlook remains bullish above 1.4070 where the lower Bollinger band guards the uptrend from the June low.
For today: USDCAD support is at 1.4140 and 1.4100. Resistance is at 1.4190 and 1.4230.
Today’s expected range is 1.4110-1.4190.
FX Heat Map
FX open high low 6:00 am
There’s a Kind of a Hush
Global markets are finishing the week with a muted tone. This week’s Trump drama around NATO and Iran has faded and traders are looking ahead to next week’s US inflation data and Kevin Warsh’s first testimony in front of the US House Financial Services Committee.
Axios is reporting that mediators from Qatar and Pakistan are having talks with Iranian and US negotiators in hopes for a resumption of the ceasefire.
Taking Stock
Asian equity indexes higher with Japan’s Topix gaining 0.39%, while Australia’s ASX 200 rose 0.50% and Hong Kong’s Hang Seng up 0.60%.
As of 5:30 am PT, European bourses and the S&P 500 are all flat. The 10-year Treasury yield is 4.543%, the DXY is 100.86, and gold (XAUUSD) is 4,099.79.
EURUSD | Range 1.1425-1.1461
EURUSD continued to grind out small gains on marginally improved risk sentiment due to US and Iran developments. The single currency is struggling to make headway after the FOMC minutes reminded traders that the Fed has a slightly hawkish bias while analysts have shifted ECB rate hike odds from July to September. German HICP data came in as expected at 2.4% y/y for June, unchanged from May.
GBPUSD | Range 1.3399-1.3452
GBPUSD is trading with a slight bullish bias thanks to hawkish comments from Bank of England Chief Economist Huw Pill. He warned that UK rates are not restrictive enough and “will need to increase” this year.
USDJPY | Range 161.29-162.46
USDJPY dropped to its session low in Asia, not from intervention, but from a report that Finance Minister Satsuki Katayama plans to encourage the Government Pension Investment Fund (GPIF) and other funds to increase domestic investments.
AUDUSD | Range 0.6934-0.6970
The Australian dollar traded quietly and is poised to finish the week with a small gain. Prices continue to be underpinned by hawkish comments from an RBA official earlier this week suggesting interest rates may need to rise due to sticky inflation.
USDMXN | Range 17.4992-17.5530
USDMXN is trading a touch firmer this morning after yesterday’s softer-than-expected inflation data (actual -0.27% m/m vs forecast -0.13%) reinforced Banxico’s “rates-on-hold” stance, which the minutes reiterated yesterday.
CHINA
- PBoC Fix: 6.7989 Reuters forecast 6.7931 (prev. 6.8036)
- Shanghai Shenzhen CSI 300 fell 1.96% to 4,780.79
Sources: Investing.com, Bloomberg, Reuters, Yahoo Finance, US Census Bureau, Trading Economics, Tradingview
