January 31, 2012
USD/CAD Open 0.9977-82 Overnight Range 0.9970-1.0030
|The Canadian dollar is ended the month on a positive note, trading well through parity with US dollar and poised for further gains. Optimism (misguided?) surrounding the EU summit and a new “fiscal compact” signed by 25 of 27 EU states combined with month end rebalancing flows has given both the loonie and the Euro a boost. Overnight, the AUD/USD climbed on better than expected NAB consumer confidence, ignoring the PM’s comments about a strong AUD$ hurting the local economy. Global equity indices are all higher as are NY equity futures. Oil is $100.18/bbl and gold is $1,738.18. Canadian GDP is expected to post a 2.3% gain, yoy. US data includes Chicago Purchasing Managers Survey, and Case Shiller Home prices.
The short term CAD$ technical’s are bullish looking for a test of USD support at 0.9880, following the break of support at both 1.0030 and 0.9980. For today, USD support is at 0.9970, .9940 and .9910. Resistance is at 1.0010, and 1.0040.
The Canadian dollar strength may prove fleeting and merely a factor of month end demand rather than a wholesale global stampede into risk seeking trades. Attributing the rally to progress being made on the Greek debt talks is a tad dubious especially considering that the deal is being negotiated by an interim Prime Minister who doesn’t have a mandate from the population.
And in other news, Herman Cain has declared that he is throwing his support behind Republican Presidential candidate Gingrich (not a Whig Newton) saying that Newt’s lack of ethics and multiple mistresses are qualities he admires.
Forecast Range of the Day 0.9950-1.0030
January 30, 2012
USD/CAD Open 1.0044-49 Overnight Range 1.0010-1.0070
|The Canadian dollar gave back Friday’s gains with the EUR/USD retreating from recent highs. A mix of technical resistance in the EUR/USD 1.3240 area and a lack of a debt deal in Greece over the weekend gave the USD a lift. Another EU summit starts today and the Greeks are irate at a German plan to appoint a budget overlord, seeing it as an affront to their dignity. Global equity indices are all lower as are NY equity futures. Oil is at $99.11/bbl and gold is trading at $1,721.34.
The short term CAD$ is still in a steep uptrend channel (0.9940-1.0105) with good two way trading within the band. For today, USD support is at 1.0030, 1.0010 and 0.9980. USD resistance is at 1.0070, 1.0080 and 1.0105
The Canadian dollar remains at the mercy of investor sentiment surrounding the European debts crisis. There are a few reports that tomorrows month end fixing requirements will be USD negative, which would give the loonie a boost.
And in other news, American Express looked a tad silly after reportedly flogging a $749 cruise deal on the Costa Concordia, a week after the cruise floundered off the Italian coast. I wonder if Gold Card members with Front of the Line privileges would have received invitations to board life boats ahead of other passengers.
Forecast Range of the Day 1.0010-1.0080
January 27, 2012
USD/CAD Open 1.0010-15 Overnight Range 0.9995-1.0047
|The Canadian dollar continued yesterday afternoon’s swoon in Asia but managed to recoup all of its losses in the European session .An Italian bill auction saw lower yields and hopes of a Greek debt deal before the end of the month helped to reverse yesterdays trend. Asian equity indices were mixed, European indices are all slightly lower but US equity indices futures are all positive. The US releases GDP (forecast 3.0%, qoq, annualized) and University of Michigan Confidence (74.0) WTI Oil is at $100.08 and gold glistens at $1,722.50
The short term CAD$ technical’s are bullish while trading below 1.0060, however, as evidenced by yesterday’s trading, moves will be erratic. For today, USD support is at 0.9980 and 0.9940. Resistance is at 1.0010 and 1.0040.
The Canadian dollar will grind higher in an erratic US dollar downtrend channel, but stay vulnerable to safe haven demand for US dollars in the event of nasty headlines on the European debt situation
And in other news, Newt Gingrich, presidential wannabe, promises to have a permanent moon colony by the end of his second term. He plans on funding the project from sales of moon mined “Green Cheese” and expects that his personal “open marriage” will allow him to hit on the local extraterrestrials.
Forecast Range of the Day 0.9970-1.0030
LoonieView$ – Weekly
Through Parity and Beyond….
January 26, 2012
RECAP: The Canadian dollar was happily confined to a 1.0060-1.0160 range until Wednesday’s FOMC meeting.. The FOMC announcement that US rates will be on hold until 2014 coupled with a tad less rosier economic outlook led to many concluding that we will get plenty more quantitative easing in the months ahead. In response, equity markets around the world have soared, Gold prices jumped over $60.00 and WTI crude pushed back above $100/bbl, all due to a rapidly falling US dollar as the “risk seeking” trade came back into vogue.
Technical Outlook: The Canadian dollar has flipped into full rally mode following the break of the strong support area between 1.0030-1.0060, which will now revert to resistance. This area encompassed support derived from the 200 day exponential moving average (1.0054); the 50% fibo retracement of the 0.9407-1.0650 range from July, 2011 and multiple trading lows from October. For now, the USD is in a steep (possibly weak)downtrend channel against the CAD$, bound by 1.0080 at the top and 0.9940 on the bottom.
LoonieView: The Canadian dollar is showing signs that it is in for an extended stay above parity to the US dollar. The apparent shift of global investors into full risk seeking mode predicated on the increasingly popular view that the FOMC is priming markets for QE III argues that US dollar weakness vs. the majors will persist, boosting the CAD$ and the other commodity currencies. Upside surprises to key economic data next week including jobless reports in Canada and the US will fuel CAD$ gains. Unfortunately developments in Greece or Iran or both could spoil the party.
Forecast Range for the Week 0.9880-1.0060
January 26 2012
USD/CAD Open 1.0010-15 Overnight Range 0.9995-1.0047
|The Canadian dollar rallied against the backdrop of a sharply weaker US dollar vs the majors following yesterday’s FOMC meeting. Bernanke and Co.’s decision to push back any rate hikes until 2014 and a slight downgrading of economic expectations sparked a “risk-on ” rally. The AUD/USD got an extra kick on a report that Russia may start buying AUD for reserve purposes.. The Greek drama is still unfolding, which should (but isn’t) give EUR/USD bulls some concern. Global equity indices are all sharply higher and NY equity futures are in the “green” as well. Oil jumped on the weaker USD, trading at $100.25/bbl and gold is also higher at $1,716.72. There is a lot of data from the US today including Durable Goods (forecast 2.0%, mom-ex Transportation +0.2%) and Jobless claims (forecast +370K)
The short term CAD$ technical’s are bullish following the decisive break of the USD/CAD support area between 1.0030-1.0060 and now target a test of the 61.8% fibo retracement of the 0.9407-1.0650 range since mid-July, which is currently 0.9880. For today, USD support is at 0.9980, 0.9960 and 0.9920. Resistance is at 1.0030 and 1.0060
The Canadian dollar is benefiting from the current risk seeking mentality of investors that has seen Global equity indices jump higher on anticipation of low US rates and the risk of QE III. The major debt issues surrounding Greece, Italy, Portugal and Spain haven’t gone away and Iran remains a wild card. In addition, the EUR/USD is going to bump into strong resistance in the 1.3225 area, which could see another nasty correction occur.
And in other news, a California woman is claiming that reflected light from energy efficient windows at her condo, is melting her Toyota Prius. And Cinderella thought she had it bad when she had to deal with a pumpkin.
Forecast Range of the Day 0.9970-1.0030
January 25, 2012
USD/CAD Open 1.0127-32 Overnight Range 1.0092-1.0145
|The Canadian dollar traded quietly in Asia although the AUD/USD had a lively session after their CPI release. Japan posted their first trade deficit in 31 years which helped contribute to the bid tone for USD/JPY. A lack of progress in the Greek debt negotiations, strong EUR/USD resistance at 1.3050 and today’s FOMC meeting all served to encourage profit taking and a modest shift into risk aversion. The firmer USD tone against the majors put the Canadian dollar on the defensive. WTI oil declined to $98.26/bbl and gold is at $1,655.90.
The short term CAD$ technical’s remain mixed while the USD/CAD waffles between 1.0060 and 1.0180. The current set-up favours a break of USD resistance at 1.0145 to test 1.0180 and then 1.0220. CAD$ gains below the 1.0030-60 support zone should lead to an extension to 0.9880. For today, USD support is at 1.0105, 1.0180 and 1.0160. USD resistance is at 1.0150, 1.0180 and 1.0220
The governor of the Bank of Canada is on a panel at Davos. He could offer some words of caution about global economic growth in light of yesterday’s IMF reduction of Canadian GDP growth forecasts to 1.7% for 2012.
And in other news, a Vancouver street vendor is selling a $100 hotdog, infused with a 100 year old cognac and topped with lobster. His press conference to tout his culinary creation and to talk about his secret ingredients was done in front of a poster for “War Horse”, resulting in a stampede of orders from France.
Forecast Range of the Day 1.0110-1.0180
USD/CAD Open 1.0110-15 Overnight Range 1.0075-1.0116
|The Canadian dollar retreated overnight in another quiet session due to Chinese New Year. Japan lowered their GDP growth forecast to 2% from 2.2%, giving USD/JPY a lift. Greek debt negotiations are still on-going and the slow pace of the talks combined with the proximity of strong EUR/USD resistance, put pressure on EUR/USD and lifted USD/CAD in the process. Canadian Retail Sales are due at 8:30 (forecast0.2%, mom) and need to be well outside expectations to provide any Canadian dollar direction as the focus remains on headlines from Europe and Davos. Oil is at $99.18/bbl and gold is $1,666.30
The short term CAD$ technical’s are bearish, looking for a test of 1.0140 although the CAD$ remains in a modest uptrend while trading below 1.0180. CAD$ bulls view the pop higher from yesterday’s 1.0060 as merely corrective. Strong USD support is noted between 1.0030 and 1.0080, below which opens up a move to 0.9944 (200 day moving average.) For Today, USD support is at 1.0080 and 1.0160
The Canadian dollar is likely to remain directionless within the recent 1.0060-1.0160 range today as investors await reports from Davos, the US State of the Union address and tomorrows FOMC meeting.
And in other news, Canadian tourists continue to be victimized while on holiday. A Calgary woman was found beaten and comatose inside an elevator in her 5 star hotel. Apparently an opportunistic travel agent is now promoting caravan trips in the Sangin district of Afghanistan as a safer, saner alternative to Mexico.
Forecast Range of the Day 1.0080-1.0140