Overnight Range 1.3389-1.3449
There is plenty of Fear in FX markets stemming from mixed economic reports that continually shift the US rate hikle landscape. The Loathing comes from the US election. Both candidates trigger gag reflexes in the electorate.and around the world.
USDCAD traders appear to have also loathed today’s domestic data releases. StatsCanada announced a robust 43,900 gain in in employment for October, a far cry from the consensus forecast for a loss of 10,000 jobs. The headline was pretty but the details were uglier than a blob-fish on a dinner plate.. All the gains were in part-time employment. 23,100 full time jobs were lost. USDCAD dropped to 1.3385 and then soared to 1.3449 immediatelyu afterwards..
The Canadian Trade report added to the Loonies misery. Canada’s trade deficit widened to $-4.08 billion in September almost entirely due to the import of a large module from South Korea for the Hebron offshore oil project. StatsCanada said that without this import, the trade defict would have only been $1.2 billion.
The US nonfarm payrolls report showed a gain of 161,00 jobs vs the forecast of 175,000 but the focus quickly shifted to the 0.2% bump in average hourly earnings. This report would do nothing to dissuaed the FOMC from raising rates in December.
There wasn’t much in the way of excitement in Asia. EURUSD trading was steady to inert. And even a slew of Eurozone services PMI data releases couldn’t generate much enthusiasm.
In Asia, AUDUSD bounced within a tight range torn between improved Retail Sales data and RBA concerns about the housing market.
USDJPY traded sideways in a 102.80-103.36 range and opened in New York at 103.00.
There was a slew of Eurozone Service PMI data reports. Spain, Italay and France were modestly below forecasts while the German report was a tick higher. The Eurozone PMI was below expectations but no one cared. Traders are more focussed on todays employment data and the US election.
Sterling was unable to extend yesterday’s gains and flat-lined through the Asia and Europe sessions.
The oil price decline stopped for a rest but the intraday down trend remains intact. WTI remains under pressure due to rising US inventories and fears that the Opec production cut talks will fail.
Global equity traders lightened up. All the major Asia indices closed lower, Eurozone indices are in the red and New York futures are pointing lower.
The FOMC statement left the door wide open to a rate hike in December so today’s Non-Manufacturing (forecast 56.0) and Factory Orders data, (forecast 0.2%) will be closely scrutinized for signs that would jeopardize the rate hike view. Next Tuesday’s US election and all the drama surrounding the outcome will act as a drag on trading activity.
USDCAD technical outlook
The intraday USDCAD technicals are unchanged. The USDCAD trend is higher while prices are above 1.3360 looking for a break of resistance at 1.3450 to extend gains to 1.3480 and then 1.3550. A move below 1.3360 sets up at test of 1.3310 and then 1.3240. For today, USDCAD support is at 1.3380 and 1.3360. Resistance is at 1.3450 and 1.3480.
Today’s Range 1.3360-1.3440
Chart: USDCAD 1 hour