USDCAD Range 1.3203-1.3275  

USDCAD dipped in Asia and rallied throughout the European session right up until the US ADP employment change report was released at 8:15 am (5:15 am PST). It was slightly below expectations (Actual 190,000 vs. forecast of 201,000) and it coincided with a bounce in oil prices from an intraday low of $43.80 to above $46.00/b. Loonie traders took both as a sign to unload USDCAD which dropped to 1.3203 from 1.3270.

Equity market movements were the main FX focus and in Asia, the Shanghai Composite bounced back from a 4% decline early in the day to close almost flat.  China is starting a long weekend and a lack of domestic equity trading should bring a degree of calm to global markets. One thing to remember is that the SHCOMP is still up 40% y/y.  How are your investments doing?

The European session saw the US dollar gain against everything but NOK with traders looking ahead to Thursday’s ECB meeting and Friday’s US nonfarm payrolls report.

Yesterday’s news that Canada is in a recession combined with a weaker than expected US ISM manufacturing report merely added to the negative outlook for the Loonie stemming from soft oil prices.  However, that move has occurred and in the absence of any major data today, USDCAD will trade within a 1.3200-1.3300 range.

Technical Outlook

The USDCAD uptrend from July remains intact while trading above 1.3110 which protects the longer term uptrend line from May which remains valid above 1.2910.  Intraday, USDCAD is bouncing within a 1.3200-1.3270 range with a bias toward 1.3350

Today’s Range 1.3200-1.3270

Chart: USDCAD daily with twin uptrend lines shown