It was a good day for the commodity bloc currencies. Australia October Retail Sales rose 0.5%, beating the 0.3% that was predicted. AUDUSD popped on the news, rising to 0.7643 from 0.7598. The Reserve Bank of Australia left policy rates unchanged at 1.5% and seemed slightly more optimistic for economic and wage growth.

NZDUSD climbed from 0.6853 to 0.6895 following a speech by Acting Governor Grant Spencer.  He talked about a “dual mandate” (inflation and employment) and left traders believing that the RBNZ rate outlook is unchanged.

USDJPY traded steadily in a narrow range with traders awaiting fresh developments on US tax reform.

EURUSD did not get any traction and see-sawed in a 1.1843-1.1875 range.  Eurozone October Retail Sales (Actual -1.1% vs forecast 0.7%, m/m) and unchanged November Services PMI (Actual 56.2) caused a short-lived wobble.

Sterling was under pressure from disappointment around the Brexit talks.  GBPUSD flat-lined in Asia but dropped to 1.3372 from 1.3472 in Europe.  Weaker than expected UK Services PMI (Actual 53.8 vs forecast 55.0) exacerbated the move.

Oil prices were steady but below the overnight peak.  WTI traders are still digesting the implications of the Opec production cut extensions. Gold prices continued to consolidate losses from Friday and traded in a $1,274.61-$1,276.86 band.

USDCAD dropped in early Asia trading, falling from 1.2701 at the close to  1.2650 as Europe opened. Broad US dollar weakness, bearish technicals and the prospect for better than expected Canadian Trade data this morning drove USDCAD to 1.2631 in early New York trading.

Canada’s October Trade deficit is expected to narrow to $2.7 billion.  If it does, it will just be another piece of positive data to add to the Canada growth story. US Trade data is also due today.  Other than that, USDCAD traders will adjust positions ahead of tomorrow’s Bank of Canada policy meeting.

USDCAD Technical outlook:

The USDCAD technicals are bearish an in a minor downtrend channel between 1.2575 on the top and 1.2590 on the bottom.  Friday’s move below 1.2860 and the overnight break of support in the 1.2650-60 area suggest further downside towards 1.2500. A move above 1.2680 would suggest some 1.2630-1.2740 consolidation.  For today, USDCAD support is at 1.2610 and 1.2560.  Resistance is 1.2660 and 1.2680.

Today’s Range 1.2590-1.2670