US dollar gives up NFP gains
USDCAD Open (6:00 am) 1.3041-45 Overnight Range 1.3033-1.3122 10 Aug.16
NOTE: This chart represents gain (or loss) of G10 currencies vs. the US dollar from NY close, (4::00pm) to NY Open Aug 10, 6:00 am EDT
How soon we forget. The US dollar was in demand across the board on Friday after US employment data reported 255,000 new jobs. Those buyers were nowhere to be found overnight. EURUSD is sitting at 1.1175, above its pre-NFP level of 1.1163. GBPUSD has recouped over half of its losses while the Japanese Yen has clawed back about 75%. The Canadian dollar has joined the party, as well, despite a decline in WTI prices.
In Asia, the outgoing Reserve Bank of Australia governor, Glenn Stevens (retires on September 17, 2016) gave AUDUSD a bit of a boost when he suggested that fiscal stimulus rather than monetary stimulus may be need to sustain longer term growth, which traders took to mean that Aussie interest rates weren’t going lower, any time soon. USDJPY traded heavily throughout the overnight session.
In Europe, EURUSD climbed on the perception that the current US economic growth outlook suggests that US interest rate hikes are still a long way into the future. GBPUSD rallied with the softer dollar. Global equity indices were slightly lower while NY equity futures are slightly higher.
Oil prices declined on the API Crude stocks report showing a rise in inventories of 2.09million barrels reported at the end of the day on Tuesday. If confirmed by today’s EIA report, WTI will retreat back to $40.00/b. In addition, Saudi Arabia reportedly pumped a record 10.67 m/b in July, aggravating the supply/demand imbalance.
Today’s US data releases include JOLTS and MBA Mortgage Applications, neither of which should have much impact on FX.
USDCAD technical outlook.
The intraday USDCAD technicals are bearish while trading below 1.3070 looking for a break below support in the 1.2980 (55 day moving average) –1.3000 area to extend losses to 1.2940, the 100 day moving average. The USDCAD uptrend which has been intact since May 2, comes into play at 1.2870. A break above 1.3080 will extend gains to 1.3150. For today, USDCAD support is at 1.3010, 1.2980 and 1.2940. Resistance is at 1.3080 and 1.3120
Today’s Range 1.2980-1.3070