A mix of weak US data roused the greenback from its slumber and pushed EURUSD above its overnight high albeit not very convincingly.  EURUSD rallied from 1.1362 to 1.1396.

The monthly ADP Employment Change report missed the 185,000 forecast and showed a gain of 158,000 jobs.  Initial Jobless claims were 248,000, a tad higher than the 245,000 expected.  The US Trade deficit narrowed very slightly from April.

The data will be quickly forgotten with attention focused on the G-20 meeting and Friday’s US employment reports.

President Trump delivered a speech in Warsaw Poland. He said that cease its destabilising activities in Ukraine and elsewhere and its support for hostile regimes including Syria and Iran”.

FX markets ignored his words.

The Canadian dollar shrugged off a widening of the Trade deficit (Actual -$1.09 billion vs. forecast of -0.53 billion).  Canadian bond yields ticked higher which helped to keep the downward pressure on USDCAD.  USDCAD is currently trading at 1.2924 which is below the overnight low.

Overnight, FX markets were dull and rangebound.

AUDUSD couldn’t get any traction even after a surprise jump in the Trade surplus.  (Actual 2.47 million vs. forecast 1.1 million) AUDUSD is trading below its overnight low as is the New Zealand dollar.  Nevertheless, the price action for both currency pairs is well within the range from July 4th.

USDJPY is struggling to find direction and trading erratically inside a 112.89-113.50 range.  USDJPY is torn between risk aversion stemming from North Korea’s penchant for missile launches and the prospect of higher US interest rates.

Oil prices have added to yesterday’s gains following the end of day API Crude Stocks change report.  The 5.76 million barrel drawdown in crude inventories lifted WTI from $44.95/b to $4590/b.  Traders are hoping for confirmation from the EIA report due later this morning.

FX markets will be unlikely to stray out of their current ranges ahead of tomorrow’s US employment report. Which is expected to show a gain of 179,000 jobs.  The Canadian employment report is also due.  In addition, Friday is the official start of the G-20 meeting in Hamburg, Germany.

USDCAD Technical outlook:

The USDCAD technicals are bearish.  Prices continue to consolidate losses following the break of support in the 1.3140-50 area in a 1.2915-1.3010 range. The downtrend from June 21 is intact while trading below 1.3090 which is being guarded by an intraday downtrend from June 28 that comes into play at 1.3000.  A break below 1.2915 will target 1.2850 and then 1. 2770..

Today’s Range 1.2910-1.2980

Chart: USDCAD daily