Overnight Range 1.3191-1.3295
USDCAD retreated from the edge of the abyss thanks to a far stronger than expected Canadian employment report. Statistics Canada reported that employment rose 67,200 in September while the unemployment rate remained unchanged at 7%. USDCAD was hovering around 1.3280 prior to the data and quickly plunged to 1.3191. As usual the devil is in the details and these details are still healthy. Full time jobs were 23,000 more than double than the forecast for the entire report. Part-time jobs accounted for 44,100.
The US data was modestly disappointing. Nonfarm payrolls rose 156,000 rather than the 175,000 forecast. EURUSD spiked on the news although it is unlikely that this NFP report would dissuade the FOMC from raising rates.
Something took the shine off of Sterling during the Asia session. GBPUSD plummeted from 1.2621 to a low of 1.1491 according to Reuters. Even the low is disputed. EBS (Electronic Broking Service)
reports the low as 1.1841.
GBPUSD had been under pressure all week due rising fears of acrimonious Brexit negotiations. France President, Francois Hollande may have fanned the flames a bit when he suggested that the EU you take a “firm” negotiating stance.
The Sterling carnage began in the early hours of the Asia trading session within a 5-minute period. The rebound from the low was only slightly less aggressive than the drop, Still, GBPUSD opened in Toronto 0.0340 points below Thursday’s close. The Bank of England is on the case and investigating the cause of the chaos.
Chaos from the Sterling follies spilled over into the rest of the G10 currencies. AUDUSD .and NZDUSD both declined but quickly recovered. USDJPY bounced within a 103.50-104.00 range.
In Europe, EURUSD made a two-month low in part because some ECB officials have denied that there a plans to taper asset purchases.
The Canadian dollar took it on the chin overnight and was knocked for a loop. USDCAD climbed steadily despite WTI prices trading above $50.00/barrel. Whispers of a large M&A related order to sell Canadian dollars combined with nervousness over the possibility of a Trump presidency are being blamed for the move. USDCAD opened in Toronto at 1.3260 and accelerated to 1.3294 as stop loss orders were triggered.
USDCAD technical outlook.
The intraday USDCAD technicals turned bearish after the Canadian employment data when prices crashed through 1.3235 which represented the minor October uptrend. As a result, the 1.3250-60 area will revert to resistance. The minor uptrend from September 22 is intact while prices are above 1.3120 A break above 1.3314 (38.2% Fibonacci retracement level of the 2016 range stands will extend gains to 1.3500. For today, USDCAD support is at 1.3190 and 1.3130. Resistance is at 1.3250 and 1.3290