Overnight Range 1.3257-1.3317     

The Canadian employment report was released and the Loonie popped. USDCAD dropped from 1.3310 to 1.3257 when StatsCanada reported a gain of 11,000 jobs in November.  The move was short lived.

That is great news for those looking for part-time work because that’s where the jobs were.  Full-time jobs declined by 8,000 which, if you were looking for a silver lining, is better than the 23,000 full-time jobs lost in October.

The US nonfarm payrolls report produced an impressive decline in the unemployment rate to 4.6%, a respectable gain of 178,000 jobs but a  disappointing 0.1% drop in average hourly earnings for November, took a bit of the bloom off the rose.

The overnight session was quiet.  There was a distinct lack of volatility and churn across the G10 spectrum in overnight markets.   FX markets appear to have gotten ahead of themselves and used the excuse of “pending payrolls data” to justify retreating into a shell.

In Asia, Aussie and Kiwi traded sideways.  Traders were unwilling to get involved ahead of the US employment report.  AUDUSD hovered around the mid-point of this weeks 0.7370-0.7495 range.  The same held true for NZDUSD which is also close to the mid-point of this week’s range.

USDJPY did not go anywhere outside a narrow 113.59-114.18 band but remained well above the week’s low of 111.34

The action didn’t get any better in Europe.  Traders there were content to await the nonfarm payrolls report and had the added concern about the Italian referendum to encourage them to keep their powder dry.

The Italian Referendum concern may be akin to mountains and molehills. It isn’t the end of Italy in the EU.  It isn’t even the start of the end of Italy in the EU.  The Prime Minister has promised to resign if he loses the vote, but he is not obligated to. Promises to politicians are throwaways. (See. Dalton McGuinty)

GBPUSD was bid in Asia, supported by hopes of a “soft” Brexit. It got an added boost during the European session when PMI Construction data exceeded forecasts. Still, GBPUSD is well off yesterday’s peak.

The post-Opec oil rally has taken a time-out. WTI is consolidating in a $50.00-$52.00 range after jumping from $44.80 to $51.75 in the past two days

The oil price jump has given the Loonie wings. USDCAD has declined from 1.3535 on Monday to 1.3257 today.  The Canadian employment report provided some short-lived support to the Loonie.

The crude rally has been the catalyst and a short Canadian dollar position squeeze has been the “nitro” fueling the “Fast and the Furious” move.

Now that the major data is out of the way, traders will be cautious ahead of the Italian referendum

 USDCAD technical outlook

The intraday USDCAD technicals are bearish while trading below 1.3320. This mornings break below 1.3280 led to a test of support in the 1.3250-60 zone., which held. A move below 1.3240 would put the long-term uptrend line (currently in the 1.3140-60 area) in play.  A recovery above 1.3320 would target 1.3360 with a move above 1.3420 suggesting that a short-term bottom is in place at 1.3260. For today, USDCAD support is at 1.3260, 1.3240 and 1.3190.  Resistance is at 1.3320, 1.3360 and 1.3410.

Today’s Range 1.3250-1.3350

Chart: USDCAD 30 minute