The May Day Parades are mostly over in Europe but in New York, economic data marched across the news wires. March Personal Income rose 0.2%, a tic lower than the 0.3% in February. The US dollar slipped on the news but the data may be wonky due to the weather issues.
It was May Day or Labour Day in many parts of the world including the UK. Not surprisingly, trading activity was subdued
News that the US Congress had reached a deal to avoid shutting down the government gave a minor nod to risk seeking trades to start the week.
Japan was open (but will closed from Wednesday through Friday). USDJPY was bought supported a tac down in Manufacturing PMI which took the currency pair from an opening level of 111.23 to 111.90 and then back to 111.58 in New York.
A weaker than expected China Manufacturing PMI report (Actual 51.2 vs. forecast 51.8) was ignored by the antipodeans which managed to climb, supported by the better tone for risk. AUDUSD rallied from it’s opening level of 0.7468 to 0.7509 which is where it was when New York opened. It was also the best performing G10 currency of the session.
EURUSD peaked in very early European hours. Most markets were closed but the single currency managed to reach 1.0918, inched down to 1.0885 but it is back at 1.0918 after the US data.
Brexit tensions flared. UK’s PM May and European Commission President Jean Claude Junker met for dinner and the result was a tad less then harmonious. Mr. Juncker said Ms. May was “deluded.” Ms. May said that the UK is not obligated to pay the EU anything when the UK leaves. GBPUSD dropped from 1.2963 to 1.2903 on “hard-Brexit concern.” It has since bounced back to 1.2935.
Oil prices traded in a narrow band, albeit with a negative bias due to another rise in US rig counts and the tiny dip in China PMI. WTI dropped below the overnight, post data in New York and is currently trading at 48.92/b.
USDCAD see-sawed within a narrow range but remains in an uptrend.
President Trump has promised to deliver another version of his healthcare plan. Another failure with this plan will raise more questions about his tax plan and undermine the greenback
USDCAD Technical outlook:
The intraday USDCAD technicals are bullish while prices are above 1.3620, looking for a break above 1.3695 to extend gains to 1.3850. A break above 1.3850 opens the door to 1.4150. A move below 1.3620 would extend losses to 1.3560. For today, USDCAD support is at 1.3620, 1.3590 and 1.3560. Resistance is 1.3680 and 1.3720.
Today’s Range 1.3620-1.3795
Chart: USDCAD 30 minute