EURUSD and GBPUSD are above their overnight peaks in early New York trading. A flurry of soft US economic reports yesterday and a 4.1% drop in the weekly MBA Mortgage applications data, this morning, added to the negative sentiment surrounding the greenback.
FX traders have pared back their expectations for a June rate hike based on the soft data while the White House circus continues to raise questions about President Trump’s ability to deliver his promised tax cuts.
President Trump is under attack (again) for reportedly asking the ex-FBI Director Comey to end the inquiry into Michael Flynn, Trump’s first pick for National Security Advisor.
EURUSD traded higher thanks to the drama surrounding President Trump, rising anticipation for ECB tapering and a drop in US rate hike expectations. Eurozone CPI was as forecast at 0.4$ for April.
Sterling was choppy. GBPUSD climbed from 1.2912 to 1.2940 in Asia and then dropped to 1.2906 in Europe after the UK jobs data showed a dip in wage inflation growth. It quickly recovered on broad US dollar weakness and traded at 1.2978 in New York.
USDJPY is a victim of the Trump hysteria. It opened at 113.12 in Asia and declined steadily to 112.12 in early New York trading.
Aussie and Kiwi are bouncing within tight bands at the bottom end of their overnight ranges. AUDUSD was hurt a bout of profit taking and a small drop in Consumer Confidence. NZDUSD shrugged off yesterday’s positive GlobalDairyTrade auction, undermined by softer than expected PPI data.
USDCAD spent the night and this morning consolidating yesterday’s oil price driven gains.
And speaking of oil prices, WTI has risen from the overnight low of $48.05 resulting from the 0.882 million barrel build in US crude inventories to $49.00 following a report that Iran is in favour of extending production cuts. This morning’s EIA Crude report will decide whether WTI price gains extend to $49.50 or lead back to $48.00
USDCAD Technical outlook:
The intraday USDCAD technicals are bearish while prices are below 1.3640 looking for a break of support at 1.3570 to 1.3530 and then 1.3460. However, 1.3570 is also the base of the uptrend line from the April low. A break above 1.3660 would negate the downside pressure and argue for more 1.3580-1.3740 range trading. For today, USDCAD support is at 1.3605, 1.3570 and 1. 3530. Resistance is at 1.3640, 1.3670 and 1.3705
Today’s Range 1.3570-1.3660
Chart: USDCAD 30 minute