UK and US closed for holidays
OECD Upgrades global growth forecast
USD opens modestly lower from Friday AM except against GBP, CHF
USDCAD open 1.2066-70, Overnight range 1.2063-1.2084, Previous close 1.2073
FX at a Glance-24 hours
FX Recap and outlook
“When the cat’s away, the mice will play,” suggests people do what they want, or misbehave when their boss or another person in authority is away. The G-10 foreign exchange translation is “when the UK and US are away, FX markets do not play.” Both countries are closed for holiday’s today, and they are responsible for close to 2/3’s of the daily FX turnover.
It is NFP week as the monthly US employment report is due Friday. The risk is for an upside surprise following last months lower than expected result. The US dollar is likely to remain inside existing ranges until the data is released.
FX markets were deathly dull overnight. Asia equity markets closed mixed to lower. Chinese indices were slightly higher while Japan’s Nikkei 225 and Australia’s ASX 200 dipped. European bourses are lower, as are S&P 500 futures .
The Organisation for Economic Cooperation and Development (OECD) raised its 2021 global growth forecast to 5.8% from 4.2% in December. They predicted the global economy would return to pre-pandemic levels by the end of 2022.
EURUSD returned to the top of its overnight 1.2184-1.2204 range after starting todays Toronto session at the low. Friday’s breach of key support at 1.2140 appears to be a “false move”, leaving the bias toward 1.2300.
GBPUSD traded in a 1.4165-1.4199 range, with price action curtailed by the UK holiday. The intraday technicals are bullish above 1.4130.
USDJPY trade in a 109.64-109.93 range. Better than expected, Japanese Housing Starts data did not have an impact on trading.
AUDUSD and NZDUSD traded higher, underpinned by broad US dollar selling pressure. Australia/China trade tensions remain elevated. Australia is readying another WTO trade challenge due to Chinese tariff actions on Australian wine. New Zealand said it supports Australia as it has a dispute with Beijing over Barley tariffs.
USDCAD remains rangebound, with rising oil prices helping to cap gains. WTI oil climbed to $67.29 overnight on expectations that improving global economic growth will increase demand for crude. Traders are looking ahead to Tuesday’s March GDP data which is expected to show a 1.0% m/m gain.
Today’s Canadian data saw the Q1 Current Account revert to a $1.18 billion surplus from a $5.27 billion deficit, previously. The Raw Materials Price Index shrank to 1.0%, in April from 2.3% in March. Industrila Production was unchanged at 1.6%.
USDCAD technical outlook
The intraday USDCAD technicals are modestly bullish while prices are above 1.2050, looking for a break above 1.2090 to target 1.2150. The downtrend from April 22 is intact below 1.2110. USDCAD needs to break four year support in the 1.2030-40 area on a weekly chart or risk further 1.2040-1.2150 consolidation. For today, USDCAD support is at 1.2050 and 1.2030. Resistance is at 1.2090 and 1.2120. Today’s range 1.2040-1.2090
Chart USDCAD hourly
Source: Saxo Bank
FX open, high, low, previous close
Source: Saxo Bank