USDCAD Overnight Range 1.3248-1.3307        

USDCAD drifted lower at the opening and tested the intraday uptrend line which held and then reversed direction in part due to renewed EURUSD weakness. Reuters is reporting that the ECB will cut rates in December. (“a consensus is forming at the European Central Bank to take the interest rate it charges to banks to park money deeper into negative territory”.) EURUSD dropped to 1.0730 from 1.0770 and USDCAD is flirting with 1.3285.  This morning’s Canadian housing starts (198.1K vs. forecast 200k) were ignored.

USDCAD has performed admirably in the face of the blow-out NFP report.  There is a risk that as traders digest the US numbers, they make notice that the Canadian employment figures were no slouch, either, even allowing for election hires skewing the data. If so, top-side gains may face stiff headwinds aided by both EURCAD selling and CADJPY buying.

The FX week started slowly. China announced another huge Trade surplus ($61.64 billion) but the details were a tad soft. Markets are continuing to digest Friday’s US jobs report and its implications for a December rate hike.

The European markets were rather quiet with a bit of profit taking evident in the majors. The data calendar is rather sparse leaving the US Fed “rubber chicken” circuit to fill the void.  There are 7 Fed speakers lined up this week starting with Boston Fed President, Eric Rosengarten today.

USDCAD technical outlook

The intraday USDCAD technicals are consolidating Friday’s gains within a 1.3240-1.3320 band.  A move below 1.3240 will widen the band to 1.3140 while maintaining the uptrend from the October 15th low. Coincidently, the post NFP rally halted almost right on the 76.4% Fibonacci retracement level of the September 1.3455 peak and the October 1.2830 low.  For today, USDCAD support is at 1.3240 and 1.3210.  Resistance is at 1.3310 and 1.3340

Forecast Range for the day 1.3240-1.3320

Chart USDCAD hourly