USDCAD Open (6:00 am) 1.3254-57 Overnight Range 1.3254-1.3270
The US dollar finished the day on Monday on a mixed note and opened the same way this morning. EUR, GBP and CAD are modestly higher while the rest are slightly lower
President Trump was up to his usual antics, yesterday This time he threatened tariffs on China if President Xi Jinping didn’t meet with him at the G-20 meeting, June 28-29, in Japan. Trump accused China of manipulating their currency, giving themselves a competitive advantage. He told CNBC “They devalue their currency, they have for years: It’s put them at a tremendous competitive advantage. And we don’t have that advantage because we have a Fed that doesn’t lower interest rates,” He went on to say “We should be entitled to have a fair playing field, but even without a fair playing field — because our Fed is very, very disruptive to us — even without a fair playing field we are winning. Don’t forget: the head of the Fed in China is President Xi … he can do whatever he wants.”
Asia equity markets continued to rally following the US/Mexico agreement and ignored Trump’s tirade. AUDUSD chopped about after NAB data and opened in New York unchanged. May Business Confidence rose while business conditions were weaker. NZDUSD was a tad softer.
USDJPY rallied on the improved risk sentiment and as US 10-year Treasury yields climbed from 2.14% to 2.176%.
EURUSD traded with a negative bias and opened in New York in the middle of its 1.1309-1.1330 range. Traders are fading the post NFP rally and seem more concerned about a dovish ECB and slowing growth in the Eurozone. Disappointing Sentix investor confidence data also weighed on the single currency.
GBPUSD popped from 1.2672 to 1.2726 supported by the UK employment report and by comments from Bank of England Monetary Policy committee member Michael Saunders saying UK rates could go higher sooner than expected. Prices have retreated to 1.2712 in New York trading.
USDCAD continued to consolidate losses from Friday. Stable oil prices, better than expected housing data yesterday and a modest improvement in risk sentiment are undermining the currency pair. However, increased speculation of a Bank of Canada rate cut as soon as October is limiting the downside.
The Canadian data calendar is empty, and the US one is light. Only Producer Prices and Redbook Index are on tap.
USDCAD Technical Outlook
The intraday USDCAD technicals are bearish. Friday’s break of 1.3270 opened the door to further losses to 1.3120 and then the 2019 low of 1.3060 with 1.2990 lurking just below. A break above 1.3280 would target 1.3340. For today, USDCAD support is at 1.3240 and 1.3220. Resistance is at 1.3280 and 1.3320. Today’s Range 1.32400 1.3320
Chart: USDCAD daily
