May 16, 2012
|USD/CAD Open 1.0095-00 Overnight Range 1.0065-1.0127
The Canadian dollar continued to sink overnight with safe-haven demand for the US dollar the dominate theme in a risk averse environment. Concerns surrounding Chinese growth spurred selling of AUD/JPY in Asia while fears of a bank run in Greece, an exit from the Euro zone and contagion combined to lift the US dollar vs the majors. Despite the uncertainty, European equity indices are flat to slightly down while US equity futures are flat. Today’s US data releases include; MBA Mortgage applications, Housing starts, building permits, Industrial production and the FOMC minutes. WTI oil is at $92.31 and gold is $1,534.80
The short term USD/CAD technical’s are bullish. The break above USD resistance at 1.0060 risks a test of 1.0290. For today, USD support is at 1.0060 and 1.0040. Resistance is at 1.0130 and 1.0160
Today’s FOMC minutes may provide traders with a distraction from watching the Greek tragedy unfold. Unfortunately, the risk of contagion from a run on Greek banks combined with Jamie Dimon and his cronies at JPM making like Lehman Brothers circa 2008 means that not only is risk off the table, but the mattresses are being stuffed like a Thanksgiving turkey.
In other news, the European Association of Escorts are complaining that they are suffering contagion from the debt crisis. Apparently bankers and politicians, who have demanded Greek service, just leave without paying.
Today’s Range 1.0060-1.0160