Loonieviews April 30, 2012


LoonieViews
April 30, 2012
USD/CAD Open 0.9818-23 Overnight Range 0.9804-0.9823

The Canadian dollar is ending the month rather robustly having cracked strong US dollar support in the 0.9860-80 area late last week. Firm WTI oil at $104.93 and speculation of Canadian interest rate hikes combined with a bullish Canadian dollar technical outlook have fueled recent CAD$ gains. FX markets got off to a slow start in Asia and Europe ahead of Thursday’s ECB rate decision and Friday’s US nonfarm employment data. Asian equity indices were mixed but both European indices and NY futures are down. Canadian data releases today include; GDP (forecast 0.2% MoM) and IPP (forecast 0.3% MoM)

The short term CAD$ technical’s are bullish. The break of the 0.9880 level, the 61.8% retracement of the 0.9420-1.0660 June , 2011-29Apr12 range suggests further gains to 0.9420 (100% retracement) The 0.9880 zone should now act as a strong CAD$ support/US dollar resistance level. For today, USD support is pegged at 0.9790 and 0.9740. Resistance is at 0.9830 and 0.9880

A stronger than expected GDP number from Stats Canada today combined with a steady to higher WTI oil price and rising equity market prices will give the loonie further gains below 0.9800. Unfortunately, the release of the US nonfarm payroll data on Friday argue for the CAD$ to consolidate recent gains below 0.9880.

In other news, a circus truck travelling near Quebec City caught fire. Arriving on scene, police discovered a lion, a tiger, but no bear, oh my wandering on the side of the road. No charges were laid but police questioned a tin man, a scarecrow and a farm girl in ruby slippers.

Today’s Range 0.9770-9840

Michael O’Neill

LoonieViews

@loonieviews.com

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Loonieviews-April 24, 2012


LoonieViews
April 23, 2012
USD/CAD Open 0.9900-05 Overnight Range 0.9900-.9927

The Canadian dollar held on to yesterday’s gains although it was mostly inert for the overnight session. The AUD/USD came under pressure as weaker than expected CPI data (0.1% vs 0.7%) gave rise to deeper rate cut expectations The US dollar returned most of yesterday’s gains against the majors as European equity indices rose. The seemingly never-ending saga of political uncertainty (France, Holland) sovereign debt woes (currently Spain) and generally weak Euro zone economic data are keeping investors on the fence. Asian equity indices climbed (except Nikkei) as have both European equity indices and NY equity futures to start today. Gold is at $1,638.30 and WTI oil is $102.06. Canadian data today includes Retail Sales for Feb. (Forecast +0.2 MoM, ex-autos +0.8% MoM) The US releases include Home prices and Consumer confidence.

The short term CAD$ technical’s are bullish looking for a breakthrough 0.9880 to extend gains to 0.9810 and 0.9740 although the entire 0.9860-75 zone will be sticky. Trading will revert to the well-defined 0.9880-0.9980 range on a break above 0.9940. For today, USD support is at 0.9880, 0.9860 and 0.9820. Resistance is at 0.9920, 0.9950 and 0.9980

A stronger than expected retail sales release today should cap any Canadian dollar weakness in the 0.9940 area and allow for a probe of below 0.9880.

In other news, another Canadian MP and Cabinet Minister, Bev Oda, International Development Minister apparently diverted funds better spend to helping under privileged nations to her personal “over-privileged politician” fund. Perhaps a can of “Oda-Eaters”, liberally sprayed throughout the House of commons, will help Canadians rid themselves of the stench of this trough munching porcine.

Today’s Range 0.9870-0.9950

Michael O’Neill

LoonieViews

@loonieviews.com

Loonieviews April 23, 2012


LoonieViews
April 20, 2012
USD/CAD Open 0.9965-70 Overnight Range 0.9920-9970

The Canadian dollar drifted lower overnight in as FX markets started the week with a modest bias towards risk aversion. The AUD/USD retreated on renewed Chinese growth concerns setting the stage for caution in Europe. News that the IMF managed to beg another $420 billion for the EU bail-out fund was ignored with traders buying US dollars over uncertainty surrounding the French elections and weak European PMI data. Asian and European equity indices as well as NY equity futures are all lower. Gold is at $1,633.80 and WTI oil is $103.05

The short term CAD$ technical’s are bullish looking for a break above 0.9980 to extend US dollar gains to 1.0025. A move back below 0.9940 would negate the upside pressure leading to further 0.9880-0.9980 range trading. For today, USD support is at 0.9940, 0.9910 and 0.9880. Resistance is at 0.9980, 1.0005 and 1.0025.

The CAD$ is likely to see-saw within familiar territory as traders stay sidelined ahead of Wednesday’s FOMC meeting. A Fed statement alluding to an improving US economy would highlight the disconnect between the USA and Europe leading to further US dollar gains. The CAD$ would be sheltered from losses in this environment due to demand for the loonie against EUR, GBP and JPY.

In other news, NBC news reports that in a plot similar to the movie, Hangover, three intoxicated Aussies broke into a Sea World and frolicked with the dolphins, among other things. They woke up the next morning with a penguin in their hotel room. Sidney Crosby and company now know where their real goal-tender went, leaving them with the sorry excuse for a puck-stopper wearing number 29.

Today’s Range 0.0.9940-1.0005

Michael O’Neill

LoonieViews

@loonieviews.com

Loonieviews-April 20, 2012


USD/CAD Open 0.9920-25 Overnight Range 0.9920-25

The Canadian dollar had a relatively quiet overnight session ahead of today’s Canadian CPI data at 8:30am which is forecast to rise by 0.5% in March (2.0% YoY; Core 1.9% YoY) Concerns surrounding the Bank of Japan’s easing intentions lifted USD/JPY (and CAD/JPY) while in Europe , the USD came under pressure due to a better than expected German IFO (102.7 vs 102.5) and a sharply higher UK Retail Sales number. Meanwhile, lingering nervousness about the on-going health of the Euroland economies (as evidenced by yesterday’s denied French downgrade rumour) ahead of the G-20 meeting this weekend suggests more choppy range trading ahead. Asian equity markets were mixed but Euro equities indices and NY equity futures are both higher. Gold is $1,644.77 and WTI Oil is $102.27

The short term CAD$ technical’s are neutral while the loonie remains in the 0.9980—0.9960 trading band. For today, USD support is at 0.9880 and 0.9840. Resistance is at 0.9950 and 0.9980

The CAD$ could rise sharply on surprising uptick in inflation on speculation that the Bank of Canada would hike rates sooner than anticipated. However, this year, the FX market is littered with the carcasses of CAD$ bulls who got long loonies below 0.9900 on anticipation of a sharp CAD$ rally.

In other news, the city of Toronto is contemplating spending $14,000 to teach driving skills to 100 city employees who regularly drive to reduce accidents. The money would be much better spent on training the “other guy”, who, if you ask any motorist, “can’t drive, is an idiot, and is always to blame”.

Today’s Range 0.0.9860-0.9960

Michael O’Neill

LoonieViews

@loonieviews.com

Loonieviews April 19, 2012


LoonieViews
April 19, 2012
USD/CAD Open 0.9887-92 Overnight Range 0.9883-0.9916

The Canadian dollar continues to bump up against good US dollar support in the 0.9880 area, buoyed by a vague hint of the possibility of an interest rate hike, steady and firm WTI oil prices and a slight moderation of negative European debt sentiment. The JPY traded weaker in Asia on speculation of further BoJ easing while in Europe, a reasonably successful Spanish bond auction kept the EUR/USD near the higher end of its recent range. Elections in France (in 4 days) and Greece (May 6) may serve to temper any risk-on sentiment in the Eurozone. The Nikkei was lower but both the Aussie and Hang Seng equity indices rose. The European equity indices were higher (except Spain) and NY equity futures are also in positive territory. Gold is at $1,645.20 and WTI oil is $103.18. US Jobless claims today, expected to be 370K

The short term CAD$ technical’s are mixed while locked in the narrow 0.9880-0.9920 band- a break either side extends the move by 50 pts. Look to buy CAD$ on weakness near 0.9910 or on a move through 0.9870. For today, USD support is at 0.9880, 0.9860 and 0.9830. Resistance is at 0.9920, 0.9940 and 0.9980

In other news, Gay Pride Parade organizers in Toronto are dismayed that once again, Toronto Mayor, Rob Ford has declined their invitation to attend the annual Gay Pride parade. The rest of us, not declared legally blind, are overjoyed that we will be spared images of a pasty-white, 300 pound man in a diaper, strutting down Yonge Street, armed with a super soaker.

Today’s Range 0.0.9860-0.9920

Michael O’Neill

LoonieViews

Loonieviews April 18, 2012


LoonieViews
April 18, 2012
USD/CAD Open 0.9896-01 Overnight Range 0.9885-0.9908

The Canadian dollar kept most of yesterday’s gains overnight, flat-lining around 0.9890 in an uneventful market. The JPY traded softer on speculation of additional easing. GBP got a boost after the release of the MPC and the EUR drifted lower on economic uncertainty. Asian equity indices were higher but both European indices and NY equity futures were down. There isn’t much in the way of data from the US and the only release of note in Canada is the BoC, Monetary Policy Report

The short term CAD$ technical’s are bullish while trading below 1.0030 but needing a decisive break of 0.9880 to extend gains to at least 0.9720 Furthermore, 0.9880 is the 61.8% fibo retracement of the entire 0.9420-1.0640 from last July. For today, USD support is at 0.9880, 0.9860 and 0.9820. Resistance is at 0.9920, 0.9940 and 0.9980

The Bank of Canada MPR today will reiterate yesterday’s statement that warns of a “modest” rise” interest rates, which was behind the CAD$ spike.

In other news, former rock star and current motor city mad man, Ted Nugent, is being investigated by the US Secret Service for comments he made while urging Americans to support Romney. In fact, 11 agents have been pulled off Obama’s Columbian security detail to determine if Mr. Nugent is a threat or is just suffering from Cat Scratch fever.

Today’s Range 0.0.9860-0.9920

Michael O’Neill

LoonieViews

Loonieviews April 17, 2012


LoonieViews
April 17, 2012
USD/CAD Open 0.9970-75 Overnight Range 0.9970-1.0010

The Canadian dollar had another uneventful night, floating in obscurity in fairly calm FX seas with the US dollar still locked within recent bands against the majors. The EUR has recovered somewhat from its aborted attempt through 1.3000. A more optimistic outlook towards Spanish debt plus a better than expected German ZEW surveys have contributed to the EUR strength. Asian equity indices were lower but European indices and NY equity futures are on the positive side. WTI Oil is at $102.93 and Gold is at $1,653.20

The short term CAD$ technicals are bullish looking for a test of 0.9930 with the push through recent support at 0.9970. For today, USD support is at 0.9930 and 0.9910. USD resistance is at 0.9980, 1.0010 and 1.0040.

The Bank of Canada will announce “no change” in interest rates today at 9:00am which is unanimously expected.

In other news, an Air Canada pilot awoke from a mid-flight nap on a Toronto to Zurich flight and plunged his aircraft into a steep 400 foot dive when he mistook the planet Venus for another plane. This is not surprising as Air Canada has been mistaking passengers for cattle for years.

Today’s Range 0.9930-0.9990

Michael O’Neill

LoonieViews