Overnight Range 1.3032-1.3094

FX-At-A Glance

fx glance 11th july

NOTE:  This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close-Jul 7 (4pm) to July 11 6:00 am PST

The US dollar opened in Asia still basking in the glow from Friday’s blow-out nonfarm payrolls report (+287K).  US dollar demand really picked up on Japanese Upper House election news.  Japan’s ruling LDP Party, led by Prime Minister Shinzo Abe secured a “Super Majority”.  That was all Mr. Abe needed to hear to kick off Abeconomics Part 3. He reportedly ordered a new round of fiscal stimulus spending in the $100 billion area.  Equity traders loved it and the Nikkei soared, closing with a gain of 3.98%. The Nikkei gains translated into equity gains in Europe and the UK.

Lost in the drama from Japan was the news that the Australians had finally finished tabulating the votes from the July 2 election and declared the incumbent, Malcolm Turnbull the winner although he does not have a majority. AUDUSD rallied on the news.

The European session lacked economic data to provide trading incentive so traders were content to buy US dollars on the back of Friday’s employment data.  GBPUSD trade sideways until mid-morning when it moved below 1.2925 and dropped to 1.2850. It rebounded even more rapidly on news that resume inflator, Andrea Leadsome, the challenger to Theresa May for leadership of the Conservative party, quit the race.

The Canadian dollar was under pressure due to the US strength following the nonfarm payrolls report which was made worse by the decline in oil prices.  WTI dipped below last week’s $44.70 low and hit $44.50 on a combination of concern’s which included, slowing Asia demand and reports that US producers added rigs for the 5th week out of 6.

USDCAD technical outlook

The intraday USDCAD technicals are bullish while trading above 1.2950 with a steep uptrend line intact while prices are above 1.3040.  However, there is a lot of resistance stemming from prior tops in the 1.3090-1.3120 area and again in the 1.3140-80 area.  A break of 1.3180 should extend gains to 1.3305 (200 day moving average) and then 1.3500.  A break below 1.3040 would lead back to 1.2950.  A move below 1.2950 delays the top-side and suggests additional 1.2750-1.3120 consolidation.  For today, USDCAD support is at 1.3040, 1.3010 and 1.2970.  Resistance is at 1.3100, 1.3120 and 1.3150

Today’s Range: 1.3020-1.3120

Chart: 30 minute