FX traders were expecting US Nonfarm payrolls to surprise to the upside. It did. The US added 313,000 jobs in February, well above the 200,000 that was predicted. The US dollar reaction was unexpected. EURUSD rallied to 1.2312 from 1.2282 and then quickly dropped to 1.2280 shortly afterwards. USDJPY rose, dropped and then rallied again. A drop in average hourly earnings tarnished the result.
The Canadian employment data was released at the same time. Canada added 15,400 jobs, below the forecast for a gain of 20,000. The details were weak as well as all the gains were part-time. USDCAD dropped from 1.2890 to 1..2820 on the news but quickly rebounded to 1.2865. The data reflects a slowing domestic economy compared to a robust American outlook.
Overnight, geopolitics was in focus. President Trump and Kim Jong-un appear to have moved past threats of mutual destruction to pleasantries and platitudes. The President announced a meeting was being planned and just the thought of the two leaders talking about de-nuclearization, caused a minor ripple of risk-seeking trades. The biggest beneficiary was Japan where USDJPY rose to 106.93 from 106.18.
The Bank of Japan lest policy unchanged and BoJ governor Kuroda’s press conference was dovish.
Elsewhere, it wasn’t quite a snooze-fest but more like a slumber party. The FX majors stayed inside narrow bands with traders content to await the release of US nonfarm payrolls data.
EURUSD is still suffering from the ECB meeting. Dovish Mario Draghi is firmly in control forcing stale long EURUSD positions to liquidate. . Sterling traded in concert with EURUSD and bounced from a post NFP low of 1.3810 to 1.3835
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while prices are below 1.2900. The break of 1.2850 opens the door to further losses to 1.2790. (38.2% Fibonacci retracement of 1.2448-1.2999 range. A break above 1.2910 would retarget 1.3000.. For today, USDCAD support is at 1.2810 and 1.2790. Resistance is at 1.2905 and 1.2960.
Today’s Range: 1.2810 1.2890
