The Canadian and US employment reports were released this morning. There wasn’t much of a reaction to the data. The US nonfarm payrolls report exceeded forecasts and posted a gain of 211,000 jobs vs. expectations for a gain of 185,000. Canada’s report was a miss. Instead of the 10,000 jobs forecast, Canada only added 3,200. USDCAD barely budged on the news.
Overnight, Japan was closed for the third day in a row. USDJPY rose from 112.30 to 112.64 in early Asia trading but plunged back to 112.07 just as Europe opened.
AUDUSD dropped from 0.7415 to 0.7368 in Asia on falling iron ore prices but rebounded in Europe. It opened in New York at 0.7390. Kiwi traded sideways in Asia, rallied in Europe, and opened in New York at just below the peak at 0.6885
EURUSD peaked in Asia at 1.0990 then dipped to 1.0860 at the New York open. Demand for EURJPY and expectations that Macron will be the next French President have supported the currency pair.
Sterling traded sideways with a modest bid bias. as Europe opened. That move was quickly reversed when UK Services PMI data surprised to the upside. GBPUSD opened in New York at 1.2896
Oil prices dropped to $43.79 in Asia and then bounced to $45.84 in a wild session with moves exaggerated by thin markets. The bounce in WTI was due to another news story suggesting that the Opec production cuts would be extended.
USD CAD rallied with the drop in oil prices and retreated when they recovered. The currency continues to be undermined by bullish technicals and a widening of US and Canadian interest rate spreads
USDCAD Technical outlook:
The USDCAD technicals are bullish. The break above 1.3750 (previous high) targets 1.3840 and then 1.4130 (Fibonacci targets) A move below 1.3710 and then 1.3660 will target support at 1.3540.
Today’s Range 1.37 20-1.3820
Chart: USDCAD 2 hour
Source: Saxo Bank