USDCAD Overnight Range 1.2971-1.3096

The US dollar jumped immediately following the nonfarm payrolls report. NFP rose a stellar 215,000, modestly higher than forecasts and showed a rise in average hourly wages. EURUSD dropped to 1.1384 from 1.1434 and USDJPY spiked to 1.1240 from 1.1190. The move is not likely to be sustained as the entire report is rather mixed and didn’t offer up anything to change Janet Yellen’s doveish view.

For USDCAD it is a different story. USDCAD jumped to 1.3110 from 1.3017 but that move has more to do with falling oil prices than anything else. Saudi Deputy Prince Mohammed bin Salam said in a Bloomberg interview that Saudi Arabia would only freeze production if Iran does as well.  Iran is on record stating that it won’t cap production until they are exporting at pre-sanction levels.

Overnight, USDJPY traders were busy.  A weak-ish Tankan report led to a 3.55% decline in the Nikkei and USDJPY dropped as well. In Europe, EURUSD was in demand in the run-up to the NFP report.  Eurozone manufacturing PMI rose ever so slightly for the final reading in March.

USDCAD traders will be eying WTI price developments for the rest of the day but unless the 1.3190-1.3210 area breaks, the move is merely a correction inside a downtrend.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.3020 supported by the break of resistance in the 1.3050-60 area. A break of minor resistance at 1.3130 may extend gains to 1.3190. On the other hand, the short term technicals are bearish while trading below 1.3210 and only a decisive move above this level will negate the downtrend.  For today, USDCAD support is at 1.3080 and 1.3030.  Resistance is at 1.3130 and 1.3190.

Chart: USDCAD