USDCAD Overnight Range 1.2095-1.2178  

WTI oil prices slipped off their overnight peak of $59.93/bbl to $58.80 in early Toronto trading and traders used that move as an excuse to buy USDCAD.  However, with US and Canadian employment data due on Friday, today’s move is merely noise, especially considering it is a banking holiday in the UK, greatly reducing trading volumes.

Golden Week kicked off in Japan and the UK is closed for May Day which should have made for a very quiet session to start the week.  It didn’t.  EURUSD traders took the opportunity of thin markets to beat down EURUSD, taking it from 1.1220 down to 1.1130. Mostly better than expected Eurozone PMI (52.0 vs.51.9 previous) wasn’t really the factor.

In Asia, a weaker than expected April HSBC China PMI result (Actual 48.9 vs. 49.6 in March) put downward pressure on AUDUSD on speculation of that it would lead to additional stimulus from Chinese authorities. However, the key event for AUDUSD is tomorrows RBA meeting.  The market is pricing in a 75% chance of a rate cut.

USDCAD technical outlook

The intraday technicals are bearish while trading below 1.2190 and supported by the break of support at 1.2145. A drop through support in the 1.2090-1.2110 area will extend losses back to 1.1980.  A move back above 1.2205 will lead to further gains to 1.2220 and then 1.2260.

Today’s Range 1.2090-1.2170

 Chart: USDCAD 4 hour with support and resistance