USDCAD Overnight Range 1.2813-1.2872
USDCAD has pulled back (slightly) from yesterday’s lofty levels. The Tuesday-Wednesday rally lifted the currency pair 0.0423 points in a one-way move fueled by a dip in oil prices and mild risk aversion sentiment with an added dose of a “short-squeeze” in an oversold market. The Loonie wasn’t the only currency to suffer; the US dollar gained across the board.
Asia FX markets were extra quiet overnight due to a number of May 5 holiday’s. That wasn’t the case in Europe. Despite May 5 being a national holiday in many jurisdictions it wasn’t one in the UK. Trader’s there took advantage of the poor liquidity and drove EURUSD through stop losses to 1.1424 from 1.1490. It has bounced back in New York. GBPUSD suffered a similar fate and followed EURUSD lower. USDJPY was almost completely ignored and went nowhere. Still, in the context of the “big-picture” the moves were meaningless.
Tomorrow’s US non-farm payrolls report is providing traders with the usual trepidation, aggravated by yesterday’s weaker than expected ADP employment data. That also means that this mornings US data will have minimal impact.
USDCAD traders are keenly aware of the risk for a weak Canadian employment report on Friday due to “payback” from last month’s super-sized gains. Nevertheless, if WTI prices rise, the impact from weak Canadian data will be muted.
USDCAD technical outlook
The intraday USDCAD technicals are bullish. The rejection of the low followed by the rebound through strong resistance at 1.2680 has turbo-charged the rally and put the focus on the 1.2900-1.3000 resistance area. In addition, a move above 1.2960 will negate the downtrend that has been in place since January. For today, USDCAD support is at 1.2810 and 1.2770. Resistance is at 1.2880 and 1.2910
Today’s Range 1.2810-1.2880
Chart: USDCAD 1 hour