President Trump pulled America from the “Joint Comprehensive Plan of Action (JCPOA or Iran Sanctions), after accusing Iran of the leading state sponsor of terror and murderer of Americans.  Iran was not impressed, and neither were France, Germany and the UK who say they remain committed to the deal.

WTI oil traded sloppily around Trump’s speech, yesterday afternoon and the started when it was finished, WTI rose from $69.50/b to $71.14/b, opening this morning at $71.03.  A small drop in US crude inventories of $1.85 m/b, as reported by API, contributed to the gain.

USDJPY spiked in Asia trading, rising from 109.01 to 109.62 powered by a surge in Treasury yields.  The rally continued in Europe and prices peaked at 109.79 as 10-year Treasury yields crossed the 3.0% threshold.

AUDUSD and NZDUSD got spanked on the broad US dollar, bearish technicals and for Kiwi, weak Electronic Card Retail Sales data for April (-2.2% vs forecast 0.0%)  The RBNZ policy meeting will be at 5:00 pm EDT today.  They are universally expected to leave the OCR rate unchanged at 1.75%, but the statement could be modestly hawkish.

The European data cupboard was empty leaving traders to find direction elsewhere.  The US decision to pull out of the Iran nuclear deal was the obvious choice.  However, the US dollar buying lacked conviction.

EURUSD found support at 1.1823 and then bounced to 1.1865 at the New York open.  The intraday and short-term technicals are bearish while prices are below 1.1940 with traders looking for further losses to 1.1710.

GBPUSD rejected fresh weakness below 1.3500 and spent eh bulk of the overnight session in a 1.3520-50 range.  The short-term GBPUSD technical are bearish. However, traders are reluctant to extend losses ahead of Thursday’s UK data dump and Bank of England policy meeting statement and press conference.

USDCAD tracked US dollar moves against the majors.  An attempt to drive USDCAD above 1.3000 in early London trading failed at 1.2972. Surging oil prices contributed to the drop to 1.2930.

US PPI, Mortgage applications and Wholesale Inventories data are due along with Canada March Building Permits.  FX markets will continue to digest the Trump/Iran decision and watch for headlines about the upcoming US/North Korea summit.

 USDCAD Technical Outlook

The intraday USDCAD technicals are bearish after failing to extend gains above 1.2975 and then dropping through support at 1.2940, looking for a test of support at 1.2870.  A move below this opens suggests further losses to 1.2830

For today, USDCAD support is at 1.2880 and 1.2830  Resistance is at 1.2950 and 1.2990