July 30, 2012
|USD/CAD Open 1.0035-40 Overnight Range 1.0034-54
The Canadian dollar is starting the week (and ending the month) pretty much where it ended on Friday. Global markets are sceptically optimistic that the ECB’s Draghi can deliver on his promise to “do whatever it takes, to save the Euro” It will be an interesting week with the Bank of England, the ECB and the FOMC all announcing rate decisions and possibly, stimulus plans. Meanwhile, month end rebalancing flows could make for a choppy trading session. Global equity indices are higher yet NY equity indices futures are slightly lower. WTI Oil is at $90.22/bbl and gold is $1,620.44
The short term USD/CAD technicals are bearish USD. The USD plunge through the 200 day and 100 day moving averages at 1.0101 and 1.0085, respectively and the nervous dip through the 1.0040-60 support zone, suggest further US dollar losses to 0.9970 and then 0.9800. For today, USD support is at 1.0030, 1.0010 and 0.9970. Resistance is at 1.0060, 1.0080 and 1.0110.
FX markets are likely to stay close to home ahead of all the central bank action this week. Traders are very cognizant that all of last week’s gains can be erased in a heartbeat if Draghi’s actions don’t live up to his words.
And in other news, the CNOOC bid for Nexxen has many people wondering how much of Canada is for sale to China. Concern mounted during the Olympic opening ceremonies, when the Chinese Olympic team seemed to be chasing the Canadian team into the stadium. Officials in both countries denied rumors that the China bid 40 gold medals for the Canadian team and planned to rename both Olympic teams, Chinada
Today’s Range 1.0010-80