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July 3, 2020
USDCAD Open (6:00 am) 1.3574-78, Overnight Range: 1.3556-1.3576
- US markets closed for Independence Day
- Another record increase in COVID-19 cases in US
- NFP report overshadowed by weekly jobless claims
- US dollar opens largely unchanged after quiet overnight session
Percent change in US dollar
Source: Saxo Bank/IFXA
FX Recap and outlook: Global markets took a breather overnight, mostly because US markets are closed today. Asia equity indexes closed with gains across the board, following the lead from Wall Street.
European bourses drifted in and out of positive territory and gold, and oil prices were steady.
Traders continue to be cautious. The Washington Post reported that a record 55,200 COVID-19 cases were reported on Thursday. President Trump dismissed the news, tweeting, “There is a rise in Coronavirus cases because our testing is so massive and so good, far bigger and better than any other country. This is great news, but even better news is that death, and the death rate, is DOWN. Also, younger people, who get better much easier and faster!”
The President touted yesterday’s 4.8 million job gains in June, tweeting “JOBS, JOBS, JOBS! #MAGA.” He forgot to mention that America was still down 14.7 million jobs since February.
Recent events, and coronavirus outbreaks suggest a rather different result for July, a view supported by continued claims at 19.3 million, higher than the week before.
AUDUSD was underpinned by better than expected Australia Retail Sales (actual 16.9% vs April-17.7%), and a decade-high, China Caixin Service PMI print. (Actual 58.4 vs May 55). AUDUSD is trading at the top of its overnight 0.6915-0.6940 range. NZDUSD inched higher as well, trading in a 0.6506-0.6529 range.
USDJPY flat-lined in a 107.45-107.56 band, as concerns about new COVID-19 outbreaks in the US offset improved risk sentiment.
USDCAD traded sideways in a tight range overnight.
In Europe, EURUSD is adrift in the middle of its 1.1220-1.1248 range, despite better than forecast German and Eurozone Services PMI data.
The single currency remains trapped in its well-defined 1.1170-1.1350 range, needing a break either side for direction.
GBPUSD is consolidating losses after rejecting another move above 1.2520 resistance area. Sterling is also suffering from reports of serious difference between EU and UK on trade.
The BBC reported “EU negotiator Michel Barnier said the bloc’s position needed to be “better understood and respected” by the UK if an agreement is to be found. Boris Johnson said a “good deal” was possible, but it must recognise UK sovereignty in areas such as fishing.
USDCAD traded sideways in a tight range overnight. The currency pair continues to be locked in the 1.3350-1.3700 range that contained price action in June. Domestic economic data is not a factor for traders who take their cue from US dollar sentiment.
There are not any Canadian or US economic releases today.
USDCAD Technicals: The USDCAD technicals are directionless inside a 1.3510-1.3640 range. There is a mild downward intraday bias , below 1.3590, looking for a break below 1.3540 to extend losses to 1.3510. A move above 1.3590 suggests further gains to 1.3640. A weekly chart is interesting. The USDCAD uptrend from September 2017 is intact while prices are above 1.3160, while the uptrend from January 2020 comes into play at 1.3430 Today’s Range 1.3510-90
Chart: USDCAD weekly
Source: Saxo Bank
