USDCAD Overnight Range 1.2515-1.2560    

It has been a very quiet start to the week.  That’s understandable when large swathes of the FX landscape were closed for holiday’s including Australia, China, the UK and large parts of Europe.

Japan was open but markets were thinner than usual as Monday is the only work day in a  Golden Week of holidays which began on Friday. The US FX report was the major topic overnight.  USDJPY is expected to remain under pressure as the report referenced current USDJPY conditions as orderly.

China released April Manufacturing PMI which was a smidgen below the forecast (Actual 50.1 vs. 50.3). A number above 50 is considered expansionary. There was no reaction to the data because, as stated above, there wasn’t anyone around to react.

Eurozone Manufacturing PMI data as reported by Markit beat expectations, printing 51.7 vs. forecast 51.5.  EURUSD has been drifting higher all morning and managed to touch 1.1500 n general US dollar weakness.

USDCAD direction will continue to be driven by oil price movements and US dollar sentiment. The RBC PMI index was 52.2 vs. 51.5 last month while the US Markit Manufacturing PMI was 50.8 vs. 51.0 forecast.  WTI is currently trading at $45.71 having snapped a modest downtrend that started in Asia.

USDCAD technical outlook

The intraday USDCAD technicals are bearish after failing to extend gains above 1.2560 and then breaking the overnight low of 1.2530. USDCAD support is at 1.2540 and 1.2520 looking to extend losses to 1.2390.  A move above 1.2560 will extend gains to 1.2660 but only a move above 1.2810 will negate the downtrend.  For today USDCAD support is at 1.2490 and 1.2460. Resistance is at 1.2560 and 1.2660. and 1.2628

Today’s Range 1.2510-1.2560

Chart: USDCAD hourly