The Canadian dollar got run over by an automobile driven by President Trump. Trump’s threat to stick a 25% tariff on all US car imports spanked the Canadian dollar.  It started yesterday and has continued in overnight markets. USDCAD climbed from 1.2868 to 1.2920 and then accelerated through that level and is currently flirting with resistance at 1.2960  FX markets are suffering from a bout of risk aversion fears, stoked by President Trump’s actions with North Korea, China Trade, NAFTA and Iran

EURUSD rose from 1.1684 to 1.1727 in Europe, supported by a slightly better than expected German IFO report.  That move was reversed in early New York trading, and the single currency is trading at 1.1668.  New York traders are concerned about Italy and Spain political issues and the on-going trade spat

GBPUSD consolidated this week’s losses, trading in a 1.3332-1.3385 range overnight. Broad US dollar demand in New York drove prices to 1.3321 in New York.

USDJPY dropped from 109.73 to 109.13, undermined by bearish short-term technical, the drop in US 10-year yields below 3.0% to 2.62%  and a dash of risk aversion from the cancelled Singapore summit.

This week is winding down after an uninspiring, rangebound Asia and European session.  It is going to be a hot and steamy day in the Greater Toronto area.  Temperatures are expected to hit 30 Celsius.  There will be a lot of hot-air, elsewhere., as well.  Fed Chair Jerome Powell, and colleagues Robert Kaplan, Raphael Bostic and Charles Evans, are all delivering speeches today.  So is Bank of England Governor Mark Carney and European Central Bank policy committee member Benoit Coeure.

Traders will be on high alert for President Trump twitter bombs.  This week he has complained about the China trade talks, threatened a 25% tax on car imports and cancelled the North Korea summit.  Every tweet disrupted markets.

Durable Goods Orders are expected at 0.5%.  FX activity will die off rapidly after 11:00 am as UK, and US  traders kick off their long weekends.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish.  Today’s break of resistance at 1.2920 and 1.2950 while targets the 1.2960-90 area.  A break above 1.3010 opens the door to a retest of the March 2018 peak of 1.3125. A break below 1.2860 would be needed to alleviate the topside pressure.  For today, USDCAD support is at 1.2910 and 1.2860. Resistance is at 1.2960 and 1.3000

Today’s Range 1.2890-1.2990