Sterling soared when British Prime Minister Theresa May called a “snap” election for June 8. GBPUSD dropped from 1.2605 to 1.2525 when 10 Downing Street said that an announcement would be forthcoming. When the election call was made, GBPUSD rallied from 1.2525 to 1.2728 on the assumption that a strong majority win by the conservatives would strengthen the UK’s Brexit negotiating position.

The US posted a 6.8% drop in Housing Starts data for March. EURUSD rallied and USDJPY declined on the news

Overnight, it was the first day of the week for many centers around the globe. Geopolitical issues due to North Korea, Syria, Russia, and global trade led to choppy trading inside well-worn ranges for the FX majors.

In Australia, the RBA minutes sparked an AUDUSD sell-off.  The minutes suggest that housing market concerns mean domestic rates will stay lower for longer. A decline in iron ore prices added to the bearish sentiment.  AUDUSD dropped from 0.7594 to 0.7537 where it opened in New York.

Asia equity indices were mixed.  The Nikkei closed with a small gain while the Hang Seng was down 1.3%. European bourses are all in the red and Wall Street is poised to open lower.  Profit taking amid geopolitical concerns is behind the moves.

Oil prices are rebounding from the overnight low of $52.15/b although the prospect of rising US crude production and inventories may limit gains.

USDCAD was in demand to start the day and it hasn’t looked back. Canadian dollar selling against Sterling and EUR combined with soft oil prices and unsubstantiated reports of M &A led USDCAD demand is behind the move.

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish. Yesterday’s move above 1.3305 snapped a week-long downtrend and the break of 1.3320 has opened the door for a move back to 1.3440.  Longer term, the uptrend from the end of January is still intact while prices are above 1.3220.  For today, USDCAD support is at 1.3320 and 1.3280.  Resistance is at 1.3380, 1.3420 and 1.3440.

Today’s Range 1.3320-1.3420

USDCAD 2 hour