USDCAD Overnight Range 1.2910-1.2981                

The US dollar free-fall following Friday’s very weak US nonfarm payrolls (NFP) report (Actual 38,000 vs forecast 164,000) was held in check in overnight markets by uncertainty ahead of Janet Yellen’s speech today scheduled for 9:30 am PDT.  The NFP report decimated June rate hike expectations.

Traders are eager to see if Janet Yellen’s previous endorsement of rate hike predictions by various Fed officials get watered down.  Last week she said “a hike in the coming months is appropriate” which could change to something like “a hike in the coming months is not appropriate”.  If so, the US dollar will be on the defensive.  Meanwhile, Boston Fed President Eric Rosengren maintained that the central bank will continue tightening but admitted that the May employment data was disappointing.

Sterling did not have a good night.  Three polls over the weekend gave the “Leave” side the lead.  A Daily Telegraph Poll of 19,000 respondents had “Leave” ahead 69% while “Stay” garnered 29% of the vote. GBPUSD dropped through the post NFP low and touched 1.4352 but has since recovered to 1.4420.

USDCAD traded fairly quietly overnight but resumed its post-NFP decline in early North America trading due to a jump in oil prices.  WTI rose to $49.79 from $49.12/b which led to USDCAD dropping from 1.2940 to 1.2910.

There isn’t any US data of consequence this week leaving the fall-out from today’s Janet Yellen speech and Friday’s NFP report to drive FX trading.

USDCAD Technical Outlook

The intraday USDCAD technical are bearish following Friday’s break of 1.3030 representing the uptrend line from the May low.  The intraday downtrend remains intact while trading below 1.2980 looking for a break of support in the 1.2900-10 area to extend losses to 1.2835.  A move above 1.2980 points to a retest of 1.3050 and additional 1.2900-1.3100 consolidation.  For today, USDCAD support is at 1.2900, 1.2870. and 1.2835.  Resistance is at 1.2980 and 1.3020