July 16, 2012
|USD/CAD Open 1.0148-53 Overnight Range 1.0130-57
The Canadian dollar climbed during in the Asian session buoyed by sentiment that China will take steps to bolster growth. The positive bias was short lived; lasting only until Europe entered the fray. The decision by German High court on the legitimacy of Germany’s participation in the European bail-out fund will be delayed at least two months, ensuring the European debt crisis continues and that investors will remain risk averse. The Nikkei finished the day higher but the Hang Seng and the ASX200 were down. European equity indices are mixed and NY equity futures are in the red. WTI Oil is at$86.75/bbl and gold is $1,585.50. US data releases today include: Empire Mfg (forecast 4.0%), Advance Retail Sales (forecast 0.2%, ex-autos 0.0%)
The short term USD/CAD technicals are bearish US dollars, but need to stay below 1.0160 to remain that way. Initial support is seen at 1.0125 which is the 50% FIBO retracement of the range from 24April12 until today. A break of 1.0125 opens up a test of 0.9960. A move back above 1.0180 means more range trading, this time in a 1.0125-1.0250 band. For today, USD support is at 1.0125, 1.0080 and 1.0060. Resistance is at 1.0160, 1.0180 and 1.0210.
The Bank of Canada is widely expected to leave interest rates unchanged tomorrow. The official statement will likely warn of slowing growth in China and Europe and note that soft commodity prices are keeping inflation down.
And in other news, JP Morgan’s Jamie Dimon admitted that his banks massive $5 billion trading loss could get even worse. To demonstrate his no nonsense-I’m-in-charge-approach he reportedly said that the last two years of bonuses for the people responsible for the loss, would be clawed back. Even though he is the top dog, the buck stopper so to speak, he conveniently forgot to participate in the bonus return program.
Today’s Range 1.0110-60