May 23, 2012
|USD/CAD Open 1.0220-25 Overnight Range 1.0205-1.0235
The Canadian dollar bobbed around with a negative bias in a narrow range overnight, undermined by both EU debt issues going pear shaped and diminished global growth prospects driving WTI oil lower. Rising disillusion towards the EU over a perceived lack of progress with the debt crisis and the increased risk of a run on banks in Spain, Portugal, Ireland and other peripheral countries kept safe haven currencies in demand. Global equity indices all declined as have US equity futures. WTI oil is at $91.00 and gold is $1,556.40. US data releases include; New Home sales (forecast 335k) and Housing prices. Canada releases Retail Sales (forecast 0.3% MoM)
The short term USD/CAD technical’s are bullish but appear to be consolidating gains within a 1.0160-1.0260 band. A push through 1.0300 will negate a USD downtrend line intact since May 2009 setting the stage for a spike to 1.0420 and perhaps 1.0675. For today, USD support is at 1.0210, 1.0180 and 1.0160. Resistance is at 1.0240, 1.0260 and 1.0280
The Canadian dollar may benefit from a stronger than expected retail sales number, however in the current risk aversion environment, CAD$ gains will be short lived. Buy US dollars between 1.0170-90 with a stop below 1.0140.
In other news, the man who beheaded and attempted to eat a passenger on a greyhound bus from Winnipeg is now receiving escorted day passes. Apparently the public is not at risk because his medication silences the voices in his head and he has become Vegan.
Today’s Range 1.0170-1.0260