USDCAD recouped most of its overnight losses after the Canadian Inflation, and Retail Sales reports were released. ( Retail Sales-July Actual 0.4% vs. forecast 0.1%, ex-autos 0.2% vs. forecast 0.4%, m/m)  CPI was 1.4% vs forecast 1.5%,.

NK Leader Kim Jong-un is rather irked at President Trump.  He took exception to Trump’s threat to “totally destroy” North Korea, calling his remarks “mentally deranged”. The NK Foreign Minister warned of an H-bomb test, yesterday.

Traders got spooked.  The Japanese yen and Swiss franc rallied, gold jumped 0.5%, and the antipodeans declined, albeit briefly.

USDJPY was hovering near a two-month when the NK story broke. It dropped to 111.66 from 112.54. Lower US Treasury yields didn’t help.

New Zealanders head to the polls on September 23.  The incumbent National Party has a small lead over Labour.  The result will make for lively NZDUSD trading on Monday.

EURUSD traders ignored the NK Korea drama.  The single currency drifted higher, peaking at 1.2001, supported by better-than-expected Eurozone preliminary PMI data. ECB President Mario Draghi gave a speech but didn’t discuss reducing monetary stimulus.  The German election is on Sunday.  Angela Merkel is expected to win, although the make-up of the coalition may change.

Sterling, traded sideways, seemingly oblivious to global developments.  Traders were focused on UK Prime Minister Theresa May’s speech to the EU, later today.  She is expected to propose some sort of “soft”  Brexit while looking for an additional 2-year transitional period, beyond the end date. GBPUSD is currently trading near the overnight peak.

WTI oil prices consolidated above $50.00/barrel with traders waiting for news from the Opec meeting that is on-going.  Rumours that the Cartel will extend production cuts beyond the March 2018 deadline have underpinned prices.

USDCAD Technical outlook:

USDCAD is trading just above the mid-point (1.2243) of Septembers 1.2060-1.2425 range.  A minor uptrend line from the September 15 low of 1.2120 broke overnight,  with the move below 1.2305.  Longer term, USDCAD needs to break above 1..2450 or below 1.2060 for any meaningful direction.  For today, USDCAD support is at 1.2230 and 1.2170.  Resistance is at 1.2310 and 1.2360

Today’s Range 1.2240-1.2320

Chart: one hour with Trading range highlighted