USDCAD is flirting with the overnight top as the rebound from Friday’s 1.2418 low continues.  The rally has been fueled by a decline in oil prices and what is rumoured to be a corporate/fund order to buy USDCAD.  Prices broke through minor resistance at 1.2480 and 1.2530 which triggered weak stop losses.  Nevertheless, this move is merely a correction while USDCAD prices stay below 1.2630 and 1.2750, levels that may be reinforced if Friday’s Canadian employment data surprises to the upside.

The Canadian dollar wasn’t the only currency to lose ground against the greenback in overnight markets. The Japanese yen, Swiss franc, and antipodean currencies al traded lower. Only EURUSD and GBPUSD gained.

This morning’s US ADP employment report was a tad lower than forecast, adding 178,000 jobs, vs the forecast for 185,000

EURUSD touched 1.1867 overnight, a level last seen in January 2015 but quickly reversed.  It has bounced within a 1.1820-40 range since New York opened.   EURUSD ignored Eurozone PPI data which was a tad weaker than expected, coming in at 2.5% vs. the 3.4% seen in May.

Sterling is off its best levels from overnight but is elevated, trading in New York at 1.3220. A drop in UK Construction PMI to 51.9 in July from 54.98 in June capped the topside leaving and GBPUSD bounced within a 1.3192-1.3244 band.  Sterling may be getting a bit of support ahead of Thursday’s Bank of England policy meeting.  There is a small faction that thinks a rate hike is possible.

USDJPY rallied to 110.91, after opening at 110.31. Firmer Treasury yields and stock prices helped the move.  It is trading in New York at 110.71.

NZDUSD was the worst performing currency overnight after a weak employment report.  The 0.2% drop in employment for Q2 was well below the 0.7% forecast.  NZDUSD plunged from 0.7472 to 0.7418, which is where it was when New York started.

USDCAD Technical outlook:

The intraday USDCAD technicals are bullish above 1.2520 looking for a break of 1.2590 to extend gains to 1.2630.  Above 1.2630 opens the door to a test of 1.2750.  A break below 1.2520 puts 1.2420 in focus.  For today, USDCAD support is at 1.2520 and 1.2470.  Resistance is at 1.2590 and 1.2630

Today’s Range 1.2540-1.2630

Chart: USDCAD 2 hour