Overnight Range 1.2915-1.2982

FX-At-A Glance

NOTE:  This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close-Jul 5 (4pm) to July 6: 00 am PST

Today’s US ADP data surpassed the guesses and came in at 172,000 which some believe bodes well for a big jump in Friday’s nonfarm payrolls report.  Jobless Claims also declined (Actual 254,000 vs. forecast 270,000). However, the impact on FX markets was minimal.

The Canadian dollar managed to not just hang on to yesterday’s gains but extend them in overnight trading.  The surprisingly large (6.73 million/b) drawn-down in weekly crude stocks as reported by the American Petroleum Institute at the end of yesterday’s session helped boost oil prices.  WTI rallied from $47.31 to $48.12 with markets looking for today’s EIA crude report to validate the API data.

GBPUSD has rebounded after touching 1.2712 overnight and is back above 1.30000, sitting at 1.3021 currently. That move is likely just profit-taking.  GBPUSD may still drop another 7-11% in 2016 according to the gurus at Goldman Sachs. EURUSD has remained fairly quiet in a narrow range.  The ECB Monetary Policy Meeting accounts (similar to FOMC minutes) showed that the ECB were concerned about effects of Brexit on EU while noting that they had already seen an improvement in the Eurozone economy from the March stimulus package.

The big story in Asia was that S & P downgraded Australia’s credit rating, in part because they weren’t impressed with the new government’s (whatever form it takes) ability to address budget deficits.  AUDUSD sank but it quickly recovered, inline with the rally in the commodity currency bloc.

USDCAD trading may be choppy today.  The volatile Ivey PMI data, if better than expected to trigger additional USDCAD selling which would really get going if the EIA shows a large crude draw-down. Friday’s US employment data should not have as big an impact as other NFP releases.  The UK vote to leave the EU and rising risk of global market disruption means that the Fed won’t be hiking rates anytime soon so the data’s importance is diminished.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.2900 representing the uptrend line from Monday while the uptrend line from May remains intact while prices are above 1.2730.  A move above 1.2970 will extend gains back to 1.3050 while a break of 1.2900 sets the stage for a test of 1.2830

Today’s Range 1.2900-1.2970

Chart: 30 minute