Overnight Range   1.3069-1.3136       

USDCAD bounced after starting the day at the low of the overnight session, undermined by a rally in oil prices. It was a fairly subdued beginning to the first trading day in October, in part due to holiday’s in Australia, China and Germany.

USDJPY opened lower in Asia but rallied when the Nikkei Manufacturing PMI came in at 50.4. AUDUSD and NZDUSD traded sideways in Asia and rallied in Europe on firmer commodity prices.  GBPUSD gapped lower when Asia opened following British Prime Minister May’s comments over the weekend that Article 50 would be triggered at the end of March 2017.

GBPUSD was whacked again, when UK traders started their day. PM Mays comments suggest that both the UK and the EU will adopt hardline negotiating tactics. Fears that Deutsche Bank would implode and spark a Lehman like crisis abated as negotiations continue. Asia equity markets rose as did the UK FTSE100, which gained 1.12%.  A bump in UK PMI to 55.4 from 52.1 may have helped. Eurozone Markit PMI came in as forecast at 52.6.  EURUSD remained unimpressed and traded in a narrow 1.1220-40 band.

Oil prices climbed to $48.82 from $47.75, apparently still benefitting from the news that Opec has agreed to a production cap.  Traders ignored a Reuters story stating that Opec’s September output would reach its highest level in recent history on the back of increased production from Iraq and Libya.

There isn’t any Canadian data due today.  The US releases ISM Manufacturing PMI and Construction Spending, both of which are expected to increase.

USDCAD technical outlook.

 The intraday USDCAD technicals are bearish while trading below 1.3140. The down move has halted right on hourly support at 1.3065 but broken below the 4 hour uptrend line which came into play at 1.3090.  A decisive break of 1.3060 will extend losses to 1.2990-1.3000. A break above 1.3140 will negate the downward pressure and refocus on the 1.3250 resistance area.  For today, USDCAD support is ta 1.3060 and 1.3010.  Resistance is at 1.3090 and 1.3140.

Today’s Range 1.3060-1.3140