FX markets opened in New York with very little change from Friday’s close. The exception was Sterling. GBPUSD gapped higher at the Asia open after weekend reports that the EU and UK were on the cusp of a Brexit agreement. GBPUSD closed on Friday at 1.2959 and opened at 1.3005. Prices dropped from 1.3022 to 1.2967 when October UK Services PMI was 52.2 rather than 53.3 that was forecast. Prices quickly recovered due to the Brexit news.
EURUSD traded sideways in a 1.1371-1.1406 range. USDJPY continued to press against resistance in the 1.1330 area fueled by US 10-year Treasury yields above 3.20%.
The Antipodean currencies consolidated Friday’s post nonfarm payrolls losses and drifted in tight trading bands.
Oil prices inched lower again. The full US sanctions on Iran have started, although there may be as many as eight countries getting waivers on the Iran oil imports. They are India, Japan, South Korea, and maybe China. The EU vowed to protect domestic companies from the US action and are still working through the details of a Special Purpose Vehicle to facilitate payments. The American’s said they would sanction the SWIFT payment system if accommodated Iran flows. The break below $63.35/barrel targets support at $60.15/b.
USDCAD is supported by weak Canadian data (Friday’s employment report), strong US data (Friday’s Nonfarm payrolls data) and soft oil prices.
There isn’t much in the way of economic data from the US or Canada to inspire trading this week, leaving tomorrow’s US mid-term elections and Thursday’s FOMC meeting to spark interest. The FOMC meeting statement may be a “non-event” as there isn’t a press conference or any updated forecasts. The elections could bed interesting. The Democrats are certain that they will win enough seats to control the House of Representatives. If that doesn’t happen, the US dollar would rally as it would empower Trump for two more years.
The intraday USDCAD technicals are bullish while prices are above the 1.3060-70 level, the October uptrend from the 1.2785 low. A break of 1.3170 targets 1.3230 and then 1.3285. A move below 1.3050 would extend losses to 1.2940. For today, USDCAD support is at 1.3080 and 1.3050. Resistance is at 1.3120 and 1.3160.
Today’s Range 1.3070-1.3130