USDCAD soared, rising from 1.2800 to 1.2872 within minutes of disappointing domestic data dropping. Canadian inflation and retail sales reports were weak catching traders offside.  April CPI  rose 0.3% (forecast 0.4% while Core-CPI rose 0.1% (forecast 0.2%). Retail Sales missed the mark with the ex-autos component shrinking -0.2% rather than the 0.5% gains expected.

The poor data may serve to trim expectations for the Bank of Canada to increase rates in July.  However, high oil prices and ongoing NAFTA talks may limit USDCAD gains to 1.2920New York traders were getting to their desks.  The dollar is ending the week with gains across the board led by losses in the Japanese yen.

USDJPY punched above 111.00, touching 111.03, supported by 10-year Treasury yields hitting 3.122. Yields have slipped slightly, but USDJPY is hovering around 111.00. Another weak Japanese inflation report (April CPI 0.6% vs March 1.1% y/y) didn’t help.

The Antipodean currencies crept higher in Asia and then faded in Europe with both stuck in a narrow range.

Italian political concerns are spreading into EURUSD trading. Earlier this week, Italy’s 5-Star and Northern League parties floated the idea of ECB debt forgiveness. That idea has been scrapped but has given rise to fears that the ECB and Italy won’t get long in the days and months ahead. EURUSD dropped from 1.1820, just prior to the New York open to 1.1780 in early trading.

GBPUSD has fallen from 1.3526 to 1.3482 at the start of today’s session, weighed down by broad US dollar strength and Brexit issues.

Monday is a holiday in Canada, Germany, France, Denmark and Switzerland.  Canadian traders will want to get an early start to the “long weekend” suggesting that USDCAD trading will be very quiet after lunch.

USDCAD Technical Outlook

The intraday USDCAD technicals are bullish while prices are above 1..2805 with this mornings break above the 1.2830-50 resistance zone  suggesting further gains to 1.2880 which guards additional resistance at 1.2920. For today, USDCAD support is at 1.2840 and 1.2805.  Resistance is at 1.2880 and 1.2920

Today’s Range 1.2820-1.2920