Loonieviews March 30, 2012

March 30, 2012
USD/CAD Open 0.9965-70 Overnight Range 0.9955-9980

The Canadian dollar dipsy doodled in a choppy, month end, quarter end (and Japanese year end) trading session. Asia activity centered around JPY flows while the European session saw a more optimistic outlook on news that the EU Financial Ministers were very close to signing off on a trillion dollar default defence fund. Asian equity indices were down on the session however European equity indices all rose. NY equity futures are higher as well. WTI oil is at $103.45 and Gold is at $1, 665.70 US data releases include: US Personal Income (Feb. forecast +0.4%) Personal Spending (Feb Forecast +0.6%) US PCE deflator (Feb Forecast 0.3%, MoM) Chicago PMI (Forecast 63.0) Canada releases GDP (Forecast 1.7%, YoY; 0.1%, MoM)

The short term USD/CAD technicals are neutral while the currency pair bounces between 0.9880 and 1.0050. For today, USD support is at 0.9940, 0.9910 and 0.9880. Resistance is at 0.9980, 1.0010 and 1.0040

The Canadian dollar may grind higher toward 0.9880 today on a tepid shift back into risk seeking following the European Finance Ministers agreement on the bail-out fund, especially if US data provides support to the US recovery story.

In other news, a report that a crash spilled loonies all over a Northern Ontario highway had reporters scrambling to write obituaries for the Federal NDP party. Alas, it turned out to be a Brinks truck that had crashed dumping coins all over road.

Today’s Range 0.9880-9980

Michael O’Neill



Loonieviews March 29, 2012

March 28, 2012
USD/CAD Open 0.9997-1.0002 Overnight Range 0.9975-1.0005

The Canadian dollar sank below parity to the US dollar overnight, slew-footed by another shift into risk aversion trading. Recent strong upticks in equities, renewed concerns over a slowing Chinese economy and another warning from Fitch that “Greece could need another bail-out” sparked profit taking and a demand for US dollars. Oil prices dropped on a proposal for Europe and the US to reduce strategic reserves, yet oil companies continue to gouge consumers at the pumps. Global equity indices including NY equity futures are lower. WTI Oil is at $104.96 and gold is $1,657.10. US data releases today include final 4Qtr GDP and jobless claims (forecast 350K)) Canada releases IPP and at 4pm, a new federal budget.

The short term USD/CAD technicals are bullish while trading above 0.9975 targeting 1.0050 on the day. In addition, a move above the 100 day moving average (1.0006) risks further USD/CAD gains to 1.0102 (200 day moving average) For today, USD support is at 0.9975 and 0.9940. Resistance is at 1.0010, 1.0030 and 1.0050.

A new Canadian budget will be tabled in parliament today. It is an annual exercise whereby the ruling power attempts to demonstrate fiscal responsibility by cutting back expenditures they first trumpeted, while trying to get elected.

In other news, the Supreme Court of Canada has apparently decided that brothels are legal in Canada. The learned judges apparently concluded that the House of Commons is already a brothel, as the members have been screwing taxpayers since 1867 and getting paid for it.

Today’s Range 0.9975-1.0050

Michael O’Neill


Loonieviews March 28, 2012

March 28, 2012
USD/CAD Open 0.9963-67 Overnight Range 0.9947-0.9975

The Canadian dollar barely budged in another dull, directionless overnight session. The USD has stayed soft vs the majors (except JPY) due to Bernanke’s dovish remarks. USD/JPY is bid, in part due to year end repatriations which has led to selling of CAD vs JPY. GBP/USD was undermined by a slightly worse than expected UK GDP. Global equity indices including NY futures are higher. Gold is at $1,677.80 and WTI oil is $106.22. Today’s US data -Durable Goods (Forecast 3.0%)

The short term Canadian dollar technicals are back to muddled. Yesterday’s USD/CAD move through 0.9930 support didn’t even result in a decent test of 0.9880 and its subsequent move back above 0.9930 argues for another test of 1.0030. For Today, USD support is at 0.9930, 0.9910 and 0.9880. Resistance is at 0.9975, 1.0005 and 1.0030

Canadian dollar flows appear to be reasonably balanced between sales of CAD vs JPY for Japanese year end demand and EUR (on USD weakness) against CAD$ demand from high oil prices and from expectations of a US recovery benefitting Canadian exports.

In other news, the Toronto Maple Leafs were officially eliminated from the playoffs last night, for the 7th consecutive year. Leaf GM Brian Burke stated that “the Leafs are usually eliminated by January, so this year’s performance is a major improvement.

Today’s Range 0.9940-1.0005

Michael O’Neill


Loonieviews March 27, 2012

March 27, 2012
USD/CAD Open 0.9915-20 Overnight Range 0.9904-0.9920

The Canadian dollar held on to yesterday’s gains in a tepid risk-on environment sparked by yesterday’s Bernanke comments alluding to QE III. The Nikkei has recouped all its losses from last year’s earthquake as Global equity indices, including NY equity futures are all higher. In addition, WTI Oil is trading at $107.21 while gold is at $1,695.20. Today’s US Consumer Confidence report (forecast 71.0 vs. 70.8) could provide additional support to risk seekers.

The short term Canadian dollar technical’s are bullish following the break of US$ support at 0.9930. If strong USD support at 0.9840 crumbles, the CAD$ could extend gains to 0.9420. For today, USD support is at 0.9880, 0.9860 and 0.9840. Resistance is at 0.9930 and 0.9980

The Canadian dollar is getting a bit of a lift from higher oil prices in addition to continued demand for CAD$ against EUR and JPY.

In other news, schools in NY city can no longer use words like dinosaurs, birthdays dancing or Halloween on tests because they could “evoke unpleasant emotions in students” Parents in NY City are also banned from using words like “morons, imbeciles, nincompoops, and brain-dead idiots in correspondence to school officials.

Today’s Range 0.9880-0.9940

Michael O’Neill


Loonieviews March 26, 2012

March 26, 2012
USD/CAD Open 0.9978-83 Overnight Range 0.9965-1.0000

The Canadian dollar, like the rest of the FX majors, traded quietly and directionless within a narrow band. The EUR/USD got a bit of a boost with an extremely modest uptick in the German IFO business confidence survey. Traders ignored Italian PM Monti’s comments on Spain’s fiscal woes, probably seen as the “pot calling the kettle, black” Meanwhile Asian equity indices (excluding Australia) were higher as were most of the European equity indices. NY equity futures are positive to start the day. WTI Oil is at $106.65 and gold is $1,661.39. There are no Canadian data releases today.

The short term USD/CAD technicals are mixed. The lack of follow through above 1.0050 following the break through at 0.9980 argues for consolidation in a 0.9950-1.0050 range, with 0.9850 providing a solid base. For today, USD support is at 0.9960 and 0.9930 with resistance at 1.0010 and 1.0030.

The Canadian dollar continues to be insulated from sustainable bouts of weakness due to expectations of firm oil and commodity prices and demand for CAD$ against EUR and JPY.

In other news, fans at opening day for the Texas Rangers will be able to feast on a 2 foot, one pound hotdog, complete with cheese, onions, chili and a side of fries for a mere $26.00. Toronto Blue Jay fans get the same priced hotdog except theirs is three inches, three ounces and no toppings.

Today’s Range 0.9940-0.9990

Michael O’Neill


Loonieviews March 23, 2012

March 23, 2012
USD/CAD Open 0.9997-1.0002 Overnight Range 0.9973-1.0006

Canadian CPI +2.6% vs forecast of 2.7%, YoY-Core 2.3% vs forecast of 2.2%******

The Canadian dollar stayed under pressure overnight, still reeling from yesterday’s surprisingly poor Canadian retail Sales report (0.5% vs forecast of 1.8% rise) The USD gave back some of yesterday’s gains vs the majors overnight, although the loonie didn’t really benefit from the move. Global equity indices are lower but US equity futures are flat. WTI Oil is at $105.87 and gold is at $1,650.33.

The short term USD/CAD technical’s have flipped to bearish. The decisive break through the top of the CAD$ uptrend channel at 0.9980 and the 200 day moving average at 1.0002 now targets a peak at the 100 day moving average, currently 1.0110. For today, USD support is at 0.9975 and 0.9950. Resistance is at 1.0030 and 1.0050.

The Canadian dollar uptrend channel intact since mid-November has been broken suggesting further CAD$ weakness toward 1.0010. However, the prospect for higher oil prices and the uptick of core CPI, which could give rise to Canadian rate hike chatter, should limit loonie downside.

In other news, an eighteen year old high school student in Minnesota will not be able to bring his dream date, pornstar Megan Piper to the school prom because the porn star’s appearance wouldn’t be in the best interest of the student. It is unclear how long the faculty viewed Ms Piper’s filmography before coming to their decision.

Today’s Range 0.9990-1.0060

Michael O’Neill


Loonieviews March 22, 2012

March 22, 2012
USD/CAD Open 0.9951-56 Overnight Range 0.9915-0.9960

The Canadian dollar dipped overnight, caught up in the risk-off buying of US dollars on a weaker than expected Chinese Manufacturing report . In Europe, the Euro-area PMI came in at 48.& vs forecasts of 49.6 and combined with negative comments pertaining to Spain, kept the US dollar bid. Asian equity indices were higher while European equity indices declined. NY equity futures are lower as well. WTI Oil is $106.02 and gold is at $1,636.40. Today’s US data releases include: Jobless claims (forecast 350k), Leading Indicators (0.6%) and New Home Sales, Feb. Canada releases Retail Sales (forecast +0.5%, Mom, Jan)

The short term CAD$ is bullish while the USD/CAD rate is below 0.9960, the top of the USD/CAD downtrend channel since mid-November. A decisive move above 0.9980 argues for a quick ride to 1.0060. For today, USD support is at 0.9940, 0.9920 and 0.9880. Resistance is at 0.9960, 0.9980 and 1.0010.

This current bout of CAD$ pressure will be mitigated by high oil prices and demand for CAD$ against JPY and EUR giving CAD$ bulls an opportunity to reload.

In other news, interim Liberal Leader, Bob Rae is outraged over Conservative ads that remind voters of his complete incompetence during his reign as Premier of Ontario. Bob believes that his record isn’t bad because he was an NDP’er at the time, and his performance far exceeded NDP expectations.

Forecast Range of the Day 0.9910-70

Michael O’Neill