The Canada employment report was the highlight of Friday FX markets.  As highlights go, it would be akin to watching the 23rd best play in a hockey game. Canada employment gains were basically flat in April.  The headline number of a decline of 1,100 jobs is meaningless.  What is important is that the unemployment rate stayed at the 40 year low of 5.8%.  Even better full-time employment gained 378,000 jobs, year over year, a 2.6% increase.

Source:  Statistics Canada

USDCAD was sold ahead of the data resulting in a spike from 1.2737 to 1.2775. However, yesterday’s oil rally,  fueled a drop below key support at 1.2820 shifted the technical sentiment to bearish.  The slight hawkish tilt to Bank of Canada Governor Stephen Poloz’s tone in his recent speech and the improving prospects for some sort of positive NAFTa resolution in the next week, have hung a target on the 1.2640 area.

FX markets were rangebound in an uneventful overnight trading session which saw the US dollar retreat modestly, against the G10 majors.  As of today’s, open, the Canadian dollar is this week’s biggest gainer against the greenback, rising 0.87% while the 0.55% drop in the New Zealand dollar makes it the biggest loser.  Euro and yen posted small losses, the Swiss franc was unchanged, and Aussie was a tad higher.  WTI oil prices climbed 2.47%..

EURUSD has managed to hang on to most of yesterday’s post-US CPI gains.  The softer than expected data suggests the Fed may not be in too much of a hurry to raise interest rates, which led to a bout of profit-taking.  Support is at 1.1840 and Resistance is at 1.1960 and then 1.2040

Sterling is well above yesterday’s lows triggered by a dovish sounding Bank of England statement and downgrading of 2018 GDP growth forecasts.  A break above 1.3580 suggests further gains to 1.3720.

Oil prices are underpinned by Iran/Israel hostilities and the fear of new US sanctions on Iran oil.  WTI oil traded in a $71.10-$71.57 band.

USDCAD Technical Outlook

The intraday USDCAD technicals are bearish while prices are below 1.2780 looking for a move below 1.2730 to extend losses to 1.2680 (100 day moving average) and 1.2640 (200 day moving average) USDCAD support is at 1.2730 and 1.2680  Resistance is at 1.2790 and 1.2820

Today’s Range 1.2710-1.2790