What a difference the weekend makes. On Friday, it looked like the Loonie’s goose was cooked. Today, the goose isn’t even near the oven. USDCAD punched above 1.3000 after the stellar US employment report. As of 6:20 am EDT today, it was 1.2910 with an eye on support at 1.2850.
News that Italy formed a government China/US trade talks ended but whether there is or isn’t a trade war is open to debate. The US is still threatening to impose tariffs, and China says they won’t continue talks if duties are levied.
China isn’t the only nation irked at the US trade policies. The G7 Finance Ministers took a swipe at the US when the issued their communique. It said “Concerns were expressed that the tariffs imposed by the United States on its friends and allies, on the grounds of national security, undermine open trade and confidence in the global economy. Finance Ministers and Central Bank Governors requested that the United States Secretary of the Treasury communicate their unanimous concern and disappointment.”
Asia got the ball rolling. AUDUSD rallied from 0.7559 to 0.7649 after Australia April Retail Sales rose 0.4%. (forecast 0.2%) The RBA meeting is Tuesday and traders may have trimmed short positions ahead of the statement. New Zealand was closed for a holiday, but NZDUSD climbed anyway, rising from 0.6969 to 0.7035.
USDJPY bounced in a 109.46-109.75 range supported by a rise in 10-year US Treasury yields. However, residual fears of US/China trade hostilities capped gains.
EURUSD was propelled higher by profit-taking while traders ignored weaker-than-forecast Sentix Investor Sentiment (Actual 9.3 vs previous 19.2) The PPI index dipped to 2.0% (forecast 2.4%)
Construction PMI at 52.5 (forecast 49.7) lifted GBPUSD from 1.3344 to 1.3396
US Factory Orders (forecast -0.3%) is the only US data of note on tap, and it shouldn’t have any bearing on FX markets
USDCAD Technical Outlook
The intraday USDCAD technicals arebearish while prices are below 1.2970 looking for a break of 1.2890 to extend losses to 1.2850. For today, USDCAD support is at 1.2890 and 1.2850. Resistance is at 1.2970 and 1.3010,
Today’s Range 1.2890-1.2970.