President Trump, unsatisfied with annoying Hilary Clinton, the Democrat Party, Hollywood and North Korea, picked a fight with pro-athletes on the weekend. And if that wasn’t enough, he issued another travel ban, aimed at eight countries from the Middle East and Africa.  Markets did not react to the drama.

However, markets did react to inconclusive election results. Elections in New Zealand and Germany finished without a clear winner. The “Trump effect” was evident as right-wing, anti-immigrant parties made gains in both countries.

New Zealand’s National and Labour parties will spend the next couple of weeks trying to build a coalition with the New Zealand First party.  NZDUSD dropped from 0.7342 to 0.7254 at the open in Asia but bounced to 0.7273 by the New York start.

Angela Merkel will remain Chancellor of Germany, but her CDU/CSU bloc lost seats.  The far right AfD party is set to be the:” third party.”  EURUSD declined from 1.1935-1.1881, still locked in the 1.1830-1.2095  range that has held since August 25.

Election fever is rippling across Japan. There are rumours that incumbent Prime Minister Shinzo Abe, riding high in the polls, will call an election for October 22. USDJPY was choppy in a 111.95-112.52 band.

Sterling recovered from Friday’s low after  Moody’s downgraded UK sovereign debt to Aa2 from Aa1. GBPUSD rallied from 1.3477 to 1.3559 but then retreated to 1.3523  at the start of New York on Brexit concerns.

Gold prices recouped Friday’s losses, in part because of the uncertainty from the New Zealand and German elections.

WTI oil prices traded sideways in a $50.42-$50.64 range.  Opec announced on Friday that production cuts were helping cut global crude inventories to their five-year average.

USDCAD started the week unchanged from Friday’s close.  Broad US dollar strength and concerns ahead of Bank of Canada Governor Stephen Poloz’s speech on Wednesday have supported USDCAD above 1.2300.

Today is not a banner day for US or Canadian economic data but there will be no shortage of Fed Speakers. New York Fed President William Dudely, Chicago Fed’s Charles Evans are on tap

Trump’s immigration ban and his new fight with pro-athletes will distract traders today.

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish while prices ar above 1.2230, looking for a break of resistance in the 1.2370 area to extend gains to 1.2440.  A break of this level will lead to 1.2540.  A move below 1.2230 opens the door to renewed 111.2140-1.2350 consolidation.  For today, USDCAD support is at 1.2310 and 1.2260.  Resistance is at 1.2370 and 1.2420.

Today’s Range 1.2310-1.2360

Chart: 4 hour