July 31, 2012
|USD/CAD Open 1.0010-15 Overnight Range 1.0005-20
The Canadian dollar probed a tad higher in another unsettled overnight session. FX markets are nervously optimistic ahead of Thursday’s ECB rate decision and press conference, awaiting a credible plan to deal with the sovereign debt crisis. There is also a ton of data releases, an important FOMC meeting (starting today) and employment reports from Canada and the US due Friday. All this, plus the Olympics’ will ensure choppy but narrow ranges. US data releases today include: Personal Income, Personal Spending, PCE, Employment Cost index, Case Schiller home prices, Chicago PMI and Consumer confidence. Global equity indices were all up modestly. WTI oil is $90.11/bbl and gold is $1,625.21
The short term USD/CAD technicals are bearish USD. It is safe to say that the USD/CAD support zone in the 1.0040-60 area has been decisively breached, clearing the way for further CAD$ gains to 0.9800. For Today USD support is at 1.0005, 0.9980 and 0.9960. Resistance is at 1.0030 and 1.0060.
Although the catalyst behind the recent CAD$ strength is the improved outlook for Europe, the 15.1 billion elephant in the room is the all cash offer for Nexxen by CNOOC. This deal will make CAD$ bears nervous until it’s out of the way.
And in other news, London police have arrested a teenager for “malicious communications” in response to tweets he made insulting UK Olympic diver, Tom Daley. Learning that one can be arrested for insulting another forced Queen Elizabeth to ban Prince Phillip from any further public engagements.
Today’s Range 0.9980-1.0030