Canada August GDP was a treat for the Loonie. Domestic growth rose a better-than expected 0.1%, the seventh consecutive rise. The data will be overshadowed by expected USDCAD demand for month-end portfolio rebalancing purposes.It was a busy end to the month. Facebook’s quarterly earnings report was mixed. EPS rose to $1.76, beating the forecast of $1.47, which helped to lift Asia equity indices but not even close enough to put them in positive territory for the month.
ADP Employment Change report showed a gain of 227,000 jobs beating the 189,000 predicted. It suggests that Friday’s nonfarm payrolls report will be on the firm side.
The Bank of Japan policy meeting didn’t offer anything new. They left rates unchanged, slightly lowered inflation forecasts, and complained about global trade issues clouding the outlook. Broad US dollar strength and firmer US Treasury yields helped lift USDJPY from 113.03 to 113.32 before prices retreated to the lows at the New York open.
AUDUSD got whacked by weaker than expected inflation data and by a bit of month-end selling of AUDUSD for portfolio rebalancing. Soft China Manufacturing PMI data was also an issue.
Eurozone stocks have rebounded, and the major bourses are in positive territory helped by higher than expected Eurozone inflation data. (October Core CPI 1.1% vs forecast 1.0% y/y) That took some of the sting out of soft France and Italy inflation data and weaker German Retail Sales, EURUSD attempted to rally but it ran out of steam at 1.1358 and prices opened at the session low of 1.1332.
GBPUSD traded sideways in Asia and managed to eke out a gain in Europe although the sentiment and technical outlook are bearish.
Oil prices are well above yesterday’s $65.32/barrel low and are sitting at $66,42. API reported a 5.69 million barrel increase in crude inventories after the close which was the fourth consecutive rise. Traders ignored this data (as it was expected) and worried about the impact of Iran sanctions which get fully implemented next week.
The USDCAD technicals are bullish. The October uptrend comes into play in the 1.3070 area, with a break of resistance in the 1.3150-60 zone opening the door to a test of resistance at 1.3240 The intraday technicals are bullish above 1.3110. For today, USDCAD support is at 1.3110 and 1.3070. Resistance is at 1.3160 and 1.3210.
Today’s Range 1.3105-1.3160