The monthly US employment report is due tomorrow. Non-Farm payrolls is forecast to add 190,000 jobs in March with an uptick in average hourly earnings to 0.2% from 0.1%, m/m. Some traders see an upside risk to the employment number because of yesterday’s better than expected ADP employment report. (Actual 241,000 vs forecast 205,000) That assumption helped give the US dollar a bit of a boost, overnight. The greenback opened in New York with small gains across the G10 spectrum.
EURUSD inched higher in Asia but stalled at 1.2289. Prices dropped to 1.2250 in Europe and then rebounded to 1.2282, despite unimpressive Eurozone economic reports. Retail Sales rose 0.1% in February (forecast 0.5%) while Markit Services PMI and Composite PMI missed forecasts. A steady Producer Price inflation report may have provided some support. (Actual 1.6% vs forecast 1.5%, y/y)
Sterling traded lower from its Asia peak of 1.4095, encouraged by weaker than expected UK Markit Services PMI data. (Actual 51.7 vs forecast 54.0) The dip to 1.4033 was short-lived and prices bounced to 1.4062 at the New York open.
USDJPY drifted higher in Asia and accelerated in Europe. Rising US Treasury yields and the somewhat improved tone around US/China trade tariffs supported the move.
The Australian dollar rallied from 0.7710 to 0.7725 in Asia, boosted by a slightly better than expected trade surplus. (Actual AUD 825 million vs forecast AUD 700 million) The move was erased in Europe on US dollar demand ahead of Friday’s NFP report. NZDUSD traded in a similar fashion to Aussie.
Asia equity indices closed with gains for the day and European bourses are in the green. US equity futures suggest a positive open on Wall Street.Oil prices were steady, with WTI trading in a $63.32-$63.76/barrel range.
USDCAD bounced off the Asia low of 1.2748 and rallied to 1.2783 in early New York trading. Bearish technicals and rising expectations for a successful conclusion to the NAFTA talks is undermining the currency pair.
US and Canada Trade data is due this morning. Better than expected Canada export data will provide additional incentive to sell USDCAD. Weaker than expected data may be overlooked because of the NAFTA talks.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish while prices are below 1.2805 looking for a break of support at 1.2750 to extend losses to 1.2587, the 61.8% Fibonacci retracement level of the February-March range. However support from the 100 day moving average at 1.2690 and the 200 day moving average at 1.2633 will slow downside moves. For today, USDCAD support is at 1.2750 and 1.2710. Resistance is at 1.2790, 1.2810 and 1.2840.
Today’s Range: 1.2710-1.2790