USDCAD collapsed, falling from 1.2833 to 1.2737 after the Canadian employment report surprised to the upside and US nonfarm payrolls missed forecasts.

Canada employment increase by 35,000 in October, powered by an 88,000 gain in full-time jobs.

Chart:  Unemployment rate by province

Source:  Statistics Canada

The US report wasn’t a slouch either.  Nonfarm payrolls rose 261,000  but were below the 310,000 forecast. The unemployment rate declined to 4.1%. The two-month average is about 140,000 which isn’t too bad considering the US is supposedly at “full-employment.

The initial reaction was to sell US dollars vs the majors, but that move reversed itself.  EURUSD, USDJPY and GBPUSD  quickly reverted to pre-data levels.Overnight, FX markets were quiet.  Japan was closed. Trader’s were assessing the impact of Jerome Powell’s appointment and content to wait for this morning’s US employment report.

AUDUSD was the worst performing currency against the US dollar. It was sold when Retail Sales were below forecasts.  (Actual 0.0% vs forecast 0.4%)

 EURUSD and GBPUSD traded in narrow bands ahead of today’s US data.

Oil prices remain elevated.  WTI oil drifted in a $54.67-$55.00/b range.  Prices continue to be supported by hopes that production cuts get extended beyond March while there is some evidence that global demand is rising.

The US dollar may drift lower the rest of the day ahead of the debate over Trump’s tax cut plans, and risks of renewed anti-trade rhetoric as the President heads to Asia next week.

USDCAD Technical outlook:

The intraday USDCAD technicals flipped to bearish with the break below the uptrend line at 1.2820 and support at 1.2770, which also confirmed a double top in place at 1.2915.  A move below 1.2690 will lead to a test of the uptrend line from September 8, which comes into play at 1.2620.  A move above 1.2840 would negate the downside pressure..  for today, USDCAD support is at 1.2720 and 1.2680.  Resistance is at 1.2770 and 1.2820

Today’s Range 1.2680-1.2780

Chart: USDCAD 4 hour