LoonieViews July 23, 2012

July 23, 2012
USD/CAD Open 1.0161-66 Overnight Range 1.0130-70

The Canadian dollar continued to slide overnight on safe-haven demand for US dollars, driven by the perception that Spain is going the way of Greece and heightened tensions in the Middle East. The EUR/USD is touching levels not seen for 10 years and forecasts are for more weakness to come. Global equity indices including NY equity futures are lower. Commodity prices have retreated; WTI Oil is $89.18 (down $2.60) and Gold is $1,572.15 (down $12.26) There is not much in the way of data today.

The short term USD/CAD technicals are bullish US dollars, looking for a break through 1.0170 to extend gains to 1.0205 and then 1.0240. However, a move back through 1.0125 will negate the USD uptrend a see a return to 1.0060-1.0160 consolidation. For today, USD support is at 1.0145, 1.0120 and 1.0080. Resistance is at 1.0070, 1.0205 and 1.0240.

CNOOC has announced an all cash bid of CAD $15.1 billion for Calgary’s Nexxen Energy, a 61% premium over Friday’s price, according to Bloomberg. This news is enough to put a cap on US$ strength in the 1.0200-40 area while the details get finalized. The loonie will even grind out some gains in anticipation of demand if traders start to believe that the Canadian government will approve the transaction.

And in other news, Americans are shocked and devastated over the Colorado Massacre at a Batman movie. In the USA, Fireworks availability is strictly controlled, but military grade assault rifles and ammunition are available 24 hours a day.

Today’s Range 1.0110-1.0210

Michael O’Neill


Categories Markets

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