|January 13, 2012
USD/CAD Open 1.0187-92 Overnight Range 1.0165-1.0195
|The Canadian dollar had another restful night with the G-7 currencies content to bounce within well defined ranges. Chinese FX reserves dropped to a mere $3.18 trillion on suspected capital flight from EM due to the Europe crisis. Softer WTI Crude (currently $99. 10) is being blamed on a delayed EU oil embargo to Iran. The EUR/USD is off its highs in part due to a weak Italian note auction and in part due to pre-weekend profit taking. US data releases today include Merchandise trade and the University of Michigan confidence survey.
The short term CAD$ technical’s are mixed with something for both bulls and bears. CAD bulls like the series of lower US dollar highs since touching 1.0515, Nov. 25/11 which suggest a cap at 1.0280 on any CAD$ weakness. CAD bears are heartened by a series of higher US dollar lows since the beginning of Nov./11 at 0.9920 suggesting limited CAD gains/ US$ losses to 1.0130, supported by rising moving averages. For today, USD support is at 1.0160 and 1.0130. USD Resistance is seen at 1.0195 and 1.0220.
Uncertainty surrounding a sovereign debt resolution in Europe, heightened tensions with Iran and a still wobbly US economy have combined to keep investors sidelined. Monday’s Martin Luther King Day, holiday in the US should make for a quiet afternoon.
And in other news, US politicians and the media are all in a tizzy over a report that US marines peed on the corpses of a Taliban squad that lost a shooting match. The US politicians are afraid that the “despicable act” may offend the terrorist band. Obviously, the Taliban, known for using children as suicide bombers and mutilating and beheading prisoners, are a sensitive cadre of terrorists and should be coddled by the Americans.
Forecast Range of the Day 1.0130-1.0210