The long Easter break is over. President Trump’s weekend twitter storm, attacking Amazon and threatening Mexico combined with China tariffs on US goods spooked Wall Street, yesterday.  Equity indices crashed. The few FX traders that were around, largely ignored the stock market mayhem although the US dollar squeaked higher in a half-hearted risk aversion move.

Asia equity markets followed the US lead and gapped lower at the open and then spent the rest of the session recovering.The Nikkei closed in the red, down 0.45% but it was far better than the morning loss of 1.46%.

The Reserve Bank of Australia delivered what was expected. They left rates unchanged and issued a somewhat dovish statement.  AUDUSD traders were unphased and bought the currency due to its proximity to strong support and a broad but minor US dollar retreat.  AUDUSD climbed from 0.7653 to 0.7705 and then slipped as New York opened.

The improved tone to risk sentiment sparked by the recovery of Asia equity indices off their lows helped lift NZDUSD which rose from 0.7197 to 0.7261.

USDJPY was at its overnight low of 105.70 early in Asia and climbed steadily to 106.22 by the New York open.  Trader’s ignored comments from Bank of Japan Governor Kuroda that the BoJ was in early discussions about ending stimulus Those words may not have had the much immediate impact but likely put a cap on USDJPY in the 107.80-108.00 area.

EURUSD was quietly bid in Asia and rose from 1.2293 to 1.2334 in Europe.  German Retail Sales missed expectations, but bad weather may have affected the report.  Eurozone March Manufacturing PMI was 56.6, as predicted.

Sterling was largely ignored in Asia but popped to 1.4087 from 1.4050 after UK Manufacturing PMI was better than forecast.  Prices have since returned to the 1.4060 level, in part due to the downward revision in the February PMI data.

UK and Eurozone equity indices are in the red but Wall Street equity futures suggest a positive opening this morning.

USDCAD bounced inside a 1.2860-1.2940 range between month-end Thursday and today’s open.  Yesterday, prices tested both ends of the range, albeit in a poor liquidity environment.  Trade war concerns and plunging equity markets pushed prices higher. In the afternoon,  Bloomberg reported that the White House was pushing for a preliminary Nafta deal announcement at Peru, Summit of the America’s, next week.  USDCAD dropped from 1.2940 to 1.2860 by today’s open.

There isn’t any top-tier US or Canadian data available today.  There are a couple of Fed speakers but Wall Street moves, and trade talk will hog the spotlight

 USDCAD Technical Outlook

The intraday USDCAD technicals are bearish while prices are below 1.2940, looking for a break of 1.2850 to extend losses to 1.2810.   A break of support at 1.2810 will lead to 1.2780 and then 1.2720. A break above 1.2990 will shift the focus to 1.3125.   For today, USDCAD support is at 1.2850 and 1.2810.  Resistance is at 1.2890 and 1.2940.

Today’s Range: 1.2820-1.2920