LoonieViews June 21, 2012

June 21, 2012
USD/CAD Open 1.0200-05 Overnight Range 1.0179-1.0226

The Canadian dollar was unable to extend gains through 1.0160 yesterday and spent the overnight session giving up ground. Global markets gave a collective “meh” to the Fed’s extension of “Operation Twist” and that, in conjunction with diminished manufacturing output in China and Germany dragged undermined commodity prices and equity indices. The US dollar rose vs. the majors ahead of US data which includes; Jobless claims (383k) and Home sales. Canada releases Retail sales (forecast 0.2%, MoM) WTI oil is $80.48 and gold is $1,599.43

The short term USD/CAD technicals are unchanged-a bearish USD bias ahead of formidable USD support at 1.0160. USD bulls will buy dollars in the 1.0175-85 area with a stop at 1.0150, looking for a return to 1.0440. USD bears will look to sell US dollars around 1.0240 with a stop at 1.0270 for a move to 0.9960. For today, USD support is at 1.0190 and 1.0160. Resistance is at 1.0220 and 1.0250.

The highly anticipated FOMC meeting mostly disappointed markets while the soft manufacturing reports and the open wound that is the European debt crisis suggest no change to the risk on-risk off environment. Oil prices flirting with $80/bbl will fail to stimulate CAD$ demand.

And in other news, a headline seeking Toronto city councillor is proposing that Toronto ban the sale of bullets within the city. Naturally the Canadian chapter of the NRA was up in arms about the proposal, but very briefly saying “Bullets don’t kill people, uh er,…hmmm I guess they do. Doh”

Today’s Range 1.0160-1.0240

Michael O’Neill


Categories Markets

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