US dollar bulls are under duress.  Their patience is being taxed, literally. The Senate Republicans have one idea for a tax plan, and the House of Representatives has another. The wrinkle is that implementation of the Republican plan for the corporate tax rate to be cut to  20% from 35% is delayed for one year. President Trump, FX markets and Wall Street are unhappy.  The US dollar and stocks dropped.

US tax plan concerns rippled through overnight markets (again).  That was all the excuse FX traders needed to stay on the sidelines, and that’s what they did.

The US dollar opened in New York close to unchanged from Thursday’s close against the majors except for AUDUSD and NZDUSD which slightly lower.

Sterling flat-lined in Asia and enjoyed a bout of volatility in Europe. The Trade deficit narrowed, and September Manufacturing and Industrial production were better than expected.  GBPUSD remains torn between Brexit concerns and broad US dollar weakness.

EURUSD traded similar to Sterling.  ECB council member Ewald Nowotny said he agreed with Bundesbank President and ECB council member Jens Weidmann that the ECB should have signalled a clear intent to end asset purchases.  EURUSD traders didn’t care.  EURUSD traded in a 1.1623-1.1661 range.

USDCAD is stalled above support in the 1.2660-70 area but trading with a bearish bias because of US dollar weakness, firm oil prices and recent strong domestic data.

USDCAD Technical outlook:

The intraday UISDCAD technicals are directionless inside a 1.2715-1.2815 range.  A topside break leads to 1.2915 while a move below 1.2715 would target 1.2605.  USDCAD is currently trading below the mid-point of that range.

Today’s Range 1.2715-1.2815

Chart: USDCAD 30 minute