Loonieviews May 8, 2012

May 8, 2012
USD/CAD Open 0.9975-80 Overnight Range 0.9928-0.9980

The Canadian dollar retraced yesterday afternoon’s gains as the US dollar climbed against all the majors, except JPY. Once again, the recent European election results highlighted by the Greek electorate’s inability to form a government have investors leery of an EU Bail-out collapse. In addition, there is a lack of top tier economic data to trade off of. Asian equity indices were mixed (Nikkei, ADX higher, Hang Seng lower) but European equity indices and NY futures are down to start the day. WTI oil is at $96.85 and gold is $1,626.40 Canadian housings starts (forecast +204K) is the only data of note

The short term CAD$ technical’s are mixed while the USD/CAD hangs in below 0.9980. Above this level opens up a move to 1.0050 and then 1.0140. A move back through 0.9900 will revert to more 0.9840-0.9980 range trading. For today, USD support is at 0.9940, 0.9920 and 0.9895. Resistance is at 0.9980, 1.0010 and 1.0050.

The tepid shift to risk aversion trading has given the safe haven currencies a bit of a lift and concerns surrounding global growth upside have helped to whack WTI oil prices through $100/bbl, under-cutting the loonie in the process.

In other news, the US has foiled an airliner bomb threat using a new and improved version of the “Underwear Bomb”. Now passengers can look forward to TSA officers demanding passengers remove their skivvies as well as their shoes prior to boarding an airplane.

Today’s Range 0.9940-1.0010

Michael O’Neill


Categories Markets

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