USDCAD climbed to 1.2592 overnight, but the rally stalled ahead of the Canadian and US employment reports.

Canada announced a gain of 112,000 full-time jobs, which at first blush is a great result.  However, the headline number was only a gain of 10,000 due to a drop in part-time employment.  No one should be surprised that part-time employment falls in September when students go back to school.

USDCAD dropped to 1.2543 from 1.2573 on the news but recovered to the pre-data price, just as quickly.

The headline US nonfarm payrolls number was ugly.  The US lost 33,000 jobs in September.   However, the unemployment rate dropped from 4.4% to 4.2% and average hourly earnings rose to 2.9% from 2.5%.  That news took the sting out of the headline number, and the US dollar stayed firm.

Overnight, the US dollar continued its winning ways.  Only the Swiss franc managed to post a gain, and it was small.

AUDUSD got beaten up in Asia after a Reserve Bank of Australia Deputy Governor speculated about what events could spark a rate cut.AUDUSD dropped from 0.7800 to 0.7742 but recouped those losses by the New York open.

NZDUSD drifted lower through the session and opened in New York at the low on the back of broad US dollar strength.

USDJPY edged higher ahead of the US employment report, supported by rising speculation that Trump’s tax plan will get done.

EURUSD chopped about in a narrow range with what appears to be a reluctant bearish bias.  Sterling extended losses after yesterday’s break of key support at 1.3150

Oil prices drifted lower on profit taking and renewed concerns of over-supply. They continued to slide in New York trading and have posted a low of $49.49  in New York and are just above that level.

FX markets will get very quiet after lunch as traders in Canad and the US take off early for the long weekend.

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish while prices are above 1.2495 looking for a break of resistance at 1.2620 to extend gains to the 1.2750-80 area. A move below 1.2450 suggests further losses to 1.2340.  For today, USDCAD has support at 1.2540, 1.2505 and 1.2450.  Resistance is at 1.2620 and 1.2690.

Today’s Range 1.2510-1.2590

Chart: USDCAD 30 minute