May 17, 2012
|USD/CAD Open 1.0130-35 Overnight Range 1.0108-1.0138
The Canadian dollar defensively overnight mainly due to uncertainty surrounding the Euro and the risk of contagion spreading from Greece to Spain. Greece has a care-taker parliament ahead of scheduled June 17 elections. The ECB President, Draghi, appeared resigned to a Greek exit from the Euro. Asian Equity indices were mixed with the Nikkei grinding out a small gain. Elsewhere, all European equity indices were down (except Swiss) while NY equity indices are flat. WTI oil is $92.89 and gold is at $1,547.80. US data releases include; Jobless Claims (forecast +365k) and Leading Indicators.
The short term USD/CAD technical’s are bullish. The break of key USD resistance at 1.0060 earlier points to further CAD$ weakness towards 1.0250, although 1.0170 may prove sticky. For today, USD support is at 1.0110, 1.0080 and 1.0060. Resistance is at 1.0170 and 1.0210.
The Canadian dollar is vulnerable to the double whammy of soft crude oil prices and risk aversion trading leading to safe haven demand for US dollars However, CAD$ downside should be contained around 1.0250-1.0300
In other news, Ottawa Police arrested a 74 year old Polish-Canadian citizen for the audacity of calling 911 to report a break-in and assault, while not speaking English clearly. After spending 75 days in jail, all charges were dropped after his lawyer was able to explain to the judge that the elderly man was the victim, the assailants were still at large and the police-Morons.
Today’s Range 1.0090-1.0160