Fed Chair Janet Yellen delivers a speech at the University of Michigan (1:30 pm PDT) and will be taking questions. Traders will be listening for clues about US monetary policy and the pace of future rate hikes. The speech and the lack of actionable economic data will ensure a quiet trading day. That is unless, geopolitical tensions ratchet up. And that is a possibility. The US has deployed a naval strike force, led by the carrier USS Carl Vinson, to Korea as a warning, threat, or provocation to North Korea’s leader.
Meanwhile, Iran and Russia are pretending to be irked about the US missile strike in Syria.
AUDUSD capped NZDUSD gains.
EURUSD is trading with a negative bias undermined by the close French election, last week’s doveish comments from a slew of ECB officials and the prospect of higher US rates.
Sterling has bounced off the bottom of its two-week range (1.2363) but remains under pressure.
Asia began the week digesting the US nonfarm payrolls report. The headline gain of 98,000 jobs was ugly, but the details were not so bad. In addition, the March data was distorted by a massive snowstorm at the beginning of the month. Goldman Sachs analysts suggest that the storm clipped 70,000 jobs from the NFP. If so, the number would have been close to the forecast.
USDJPY rallied to 111.57 from 111.02 but retraced the move during the European session and opened in New York unchanged from Friday.
AUDUSD was under pressure due to a drop in iron ore prices. The downward pressure in AUDUSD capped NZDUSD gains.
Oil prices are firm WTI rose from $52.20 to $52.84 supported by a fresh supply disruption from Libya.
USDCAD has inched lower on the back of better than expected CMHC Housing Starts which rose to 253,700 in March vs. a forecast of 216,000.
USDCAD Technical outlook:
The intraday USDCASD technicals are bearish while prices are below 1.3420, looking for a break of 1.3380 to extend losses to 1.3340 and then 1.3310. A move above 1.3420 targets 1.3480. Longer term, the USDCAD uptrend from the February low is still intact while prices are above the 1.3300-20 area. For today, USDCAD support is at 1.3360 and 1.3310. Resistance is at 1.3420 and 1.3460
Today’s Range 1.3320-1.3420
Chart: USDCAD and Oil 30 minute
Source: Saxo Bank