LoonieViews August 29, 2012


LoonieViews
August 29, 2012
USD/CAD Open 0.9889-94 Overnight Range 0.9878-96

The Canadian dollar went nowhere overnight as did the rest of the majors, content to await Bernanke’s comments from Jackson Hole. Even Japan’s Vice Finance Minister for International Affairs threat of “decisive” intervention to weaken then JPY and help the economy, barely made a ripple. US data today includes; GDP (forecast 1.7%), Pending Home sales and the Beige Book. Canada releases IPP. WTI oil is $96.10/bbl and gold is $1,666.90

The short term (hourly) USD/CAD technicals are bullish USD. The 0.9840-60 support area for USD/CAD was tested again and held. A move back through resistance at 0.9900 should extend gains to a minimum of 0.9940 with 1.0040 a risk. However, within the context of a daily chart, (see below) the USD/CAD remains in a downtrend channel and US dollar strength is merely corrective. For today, USD support is at 0.9880, 0.9860 and 0.9840. Resistance is at 0.9905, 0.9940 and 0.9980

Hurricane Isaac has so far proven to be less destructive than Ivan seven years ago which will also alleviate the threat to oil refineries and rigs, reducing the pressure on oil prices. That may undermine the loonie a tad. Meanwhile, month end demand for US dollars in a thin market could lead to the USD/CAD rate spiking to 0.9980. CNOOC may be lurking in the weeds with offers to buy CAD$, even though the Nexxen acquisition has yet to be approved.

And in other news, a Canadian Senator, diagnosed with dementia and ruled legally incompetent continued to vote in the Senate until the end of June. Apparently her greatly reduced mental capacities still exceeded those of the other 105 members of the less than august body.

Today’s Range 0.9875-0.9930

NOTE: THIS IS THE LAST LOONIEVIEWS UNTIL SEPTEMBER 4

Michael O’Neill

LoonieViews

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Loonieviews Aug. 28, 2012


LoonieViews
August 28, 2012
USD/CAD Open 0.9889-94 Overnight Range 0.9889-0.9915

The Canadian dollar continues to flirt around the 0.9900 area, devoid of domestic directional drivers and exposed to the vagaries of Eurozone debt comments, month end flows and speculation surrounding the Jackson Hole meeting on Friday. News that Mario Draghi, ECB president, changed his mind and decided not to attend was viewed negatively. Global equity indices were mixed but US equity indice futures are higher. Gold is $1,665.80 and WTI oil is $96.10.

The short term USD/CAD technicals are bearish USD. A move through the 0.9860-80 zone should lead to further US dollar losses to 0.9800. A move back through 0.9940 will mean more 0.9880-0.9980 consolidation. For today, USD support is at 0.9880 and 0.9960. Resistance is at 0.9910 and 0.9930.

The US Consumer confidence report today (forecast 66.0) will be the only piece of economic data for markets to trade off today.

And in other news, the new commissioner of the RCMP, charged with the task of cleaning up corruption and incompetence in the force, was called on the carpet for using 8 on duty RCMP officers as a color guard at his wedding. He only offered to pay ($912 representing the salaries of the officers, he says.) after being caught. Why do so many senior bureaucrats think they are entitled to be feted in the style of a medieval monarch, at the taxpayers’ expense?

Today’s Range 0.9900-0.9940

Michael O’Neill

LoonieViews

LoonieViews Aug.27, 2012


LoonieViews
August 27, 2012
USD/CAD Open 0.9899-04 Overnight Range 0.9899-0.9925

The Canadian dollar firmed slightly in an extra quiet session due to a London holiday. No meaningful data and an absence of European debt headlines contributed to the lack of activity. Merkel remained ambivalent towards Greece, the German IFO expectations were slightly better than some forecasts and Hurricane Ivan’s track up the US Gulf coast led to higher crude prices (WTI $97.19). Ben Bernanke will be speaking at a symposium in Jackson Hole on Friday. Some believe the speech could be similar to the 2010 speech where announced QEll while others say any stimulus announcement won’t be until after the Sept.13-14 FOMC meetings. Asian equity indices closed mixed, European equity indices are mostly higher and NY equity indice futures are in the green.

The short term USD/CAD technicals are bearish. The chart below (hourly) shows a fairly good downtrend pegging USD resistance at 0.9910. Above this level suggests further 0.9885-0.9950 consolidation. A move through support in the 0.9880-85 zone sets up a test of the 0.9840-60 zone and then 0.9800.

The end of summer plus the Bernanke speech Friday, warns that trading this week will be choppy and directionless inside current ranges. However, month end activity could make for a lively Thursday session

And in other news, a Grizzly bear killed a man in the Yukon’s Denali Park as he apparently got to close when snapping a picture. Reportedly, both Sean Penn and Alex Baldwin have sided with the bear.

Today’s Range 0.9880-0.9919

Michael O’Neill

LoonieViews

LoonieViews August 23, 2012


LoonieViews
August 22, 2012
USD/CAD Open 0.9907-12 Overnight Range 0.9888-0.9925

The Canadian recovered somewhat, following the release of the FOMC minutes suggesting that a 3rd round of quantitative easing was in the cards, which continued during the Asian session but retreated during the European session, as did both the Aussie and Kiwi. Both suffered slightly on a lower HSBC China PMI. European PMI’s are pointing to another Eurozone recession as well.

The US, QE3 theme elevated European equity indices and NY Equity indice futures as well as gold ($1,664.90) and oil (WTI $97.90). Today’s US data releases include; Jobless claims (forecast 365k), Markkit Manufacturing PMI (51.5) and new home sales (July 0.3%)

The short term USD/CAD technicals are bearish. The USD is struggling to maintain gains above 0.9900 and a dip below this level should see a return to 0.9850. However, a move through 0.9925 would argue for further USD strength to test 0.9940 and perhaps 0.9980. For today, USD support is at 0.9900, 0.9880 and 0.9840. Resistance is at 0.9920 and 0.9940

The Canadian dollar appears to be under performing in the face of rising commodity prices and anticipation of another stimulus package from the Fed. One possible explanation for this could be that long CAD$ positions got over extended and needed to be trimmed, especially in light of some selling of CAD vs. EUR and JPY. This is unlikely to last ahead of further QE3 US dollar selling.

And in other news, Britain’s Prince Harry is in hot water for having his royal jewels displayed after photos from a Vegas party he hosted, were posted on line. The bevy of naked beauties attending the British royal ensured that the blue blood didn’t suffer from blue balls

Today’s Range 0.980-0.9920

Michael O’Neill

LoonieViews

LoonieViews August 22, 2012


LoonieViews
August 22, 2012
USD/CAD Open 0.9853-58 Overnight Range 0.9853-87

The Canadian dollar reversed course yesterday, coincidently right around the 11:00 am fixing time, easily cracking USD resistance at 0.9880 and then traded defensively throughout the overnight session. The Japanese Trade deficit surprised to the down side fueling a minor risk aversion shift which led to lower equity indices across Asia and Europe. NY equity indice futures are lower as well. However, FX trading (including the loonie) remains directionless inside well defined ranges. FX traders are looking to the US housing starts release (Forecast +4.52 mio) to spark another shift back to the US recovery theme. Canadian retail Sales and the BoC governor, Mark Carney’s speech, may provide some ammunition for CAD$ traders. WTI oil is $96.63 and gold is $1,639.00

The short term USD/CAD technicals are bullish USD. The USD move through 0.9880 snapped a short term downtrend channel and is now aiming for 0.9940 which if broken will see a quick move to 0.9980. However, the current USD strength is still contained within the overall US dollar downtrend. Sell US dollars around 0.9930 and again near 0.9970-Stop loss over 1.0005. For today, USD support is at 0.9900 and 0.9880. Resistance is at 0.9940 and 0.9980

The Canadian dollar remains in a happy place, without a lot of near term negatives looming. FX trading is still on the light side due to the numerous end of summer vacations and the current USD/CAD downtrend remains intact.

And in other news, the Toronto District Housing Commission is buried under a backlog of over $750 million in urgent repairs required to fix their portfolio of social housing. Despite well documented cases of extreme fiscal mismanagement, senior managers received golden handshakes big enough to make an investment banker proud. Those managers, who didn’t get turfed, all received substantial bonuses, mostly for being senior managers.

Today’s Range 0.9900-0.9940

Michael O’Neill

LoonieViews

LoonieViews August 21, 2012


LoonieViews
August 21, 2012
USD/CAD Open 0.9853-58 Overnight Range 0.9853-87

The Canadian dollar managed to grind higher overnight, in concert with a rising Aussie dollar. The AUD/USD got a lift from the omission of any remarks pertaining to limiting the AUD/USD rise, in the minutes of the Aug. 7, RBA meeting. In Europe, market participants were taking long deep hits from the “Optimism” bong, shifting into risk seeking trades. Somehow, they got the notion that Jean Claude Junkers visit to Greece, lower borrowing costs in Spain and forecast for a stronger US housing report tomorrow are signs that the ECB may finally be making headway in resolving the debt crisis. Europe equity indices and NY equity indices futures are higher. WTI oil is $95.89 and gold is $1,615.30. There are no data releases of note from Canada or the USA.

The short term USD/CAD technicals are bearish USD. The USD downtrend channel is well defined. It is bordered by 0.9790 on the bottom and 0.9990 on the top. For today, USD support is pegged at 0.9840 and 0.9820. Resistance is at 0.9870 and 0.9995.

Daily Chart1

The Canadian dollar will continue to slowly grind higher, supported by the dubious improvement in sentiment surrounding Europe, anticipation of healthy economic data from the US, and the ever present overhang of CAD$ demand from the CNOOC/Nexxen takeover.

And in other news , the US Republican presidential nominee, Milt Romney is reportedly studying Canada’s Stephen Harper’s manifesto on how to prevent party members from talking to anybody anywhere and at any time. Rep. Todd Akin of Missouri’s, ill-informed analysis of the female anatomy’s super defensive powers during a “legitimate rape” have sparked a groundswell of new support for the Democrats. “Re-Elect Barry Obama, Yes, It Can Get Worse”.

Today’s Range 0.9820-0.9880

Michael O’Neill

LoonieViews

LoonieViews Augsut 20, 2012


LoonieViews
August 17, 2012
USD/CAD Open 0.9878-83 Overnight Range 0.9876-0.9895

The Canadian dollar basically flat-lined in another uninspiring overnight session. The loonie shrugged off Friday’s weaker than expected Canadian CPI release as traders realized that the data would have zero effect on domestic interest rates. The thin summer markets have players grasping at straws to discern a direction. Overnight, it was a report in Der Speigel suggesting that the ECB would cap sovereign bond yields a notion dispelled by the Bundesbank. Not surprisingly earlier USD losses were quickly recovered. WTI Oil is $95.89 and gold is $1,615.30 Global equity indices were flat to mostly positive and NY equity indice futures are also flat. There is no data of note from the US or Canada today

The short term USD/CAD technicals are bearish USD. The USD is consolidating recent losses in a narrow 0.9960-95 band with a bias for further weakness. For today, USD support is at 0.9860 and 0.9840. Resistance is at 0.9900 and 0.9920.

There is a distinct lack of meaningful economic releases from both Canada and the US this week which should ensure another round of directionless, lack luster trading, leaving positions vulnerable to headlines about sovereign debt plan resolutions.

And in other news, Gu Kailai ,the wife of one of China’s political stars, pled guilty to the murder of a British businessman. She was given a suspended death sentence. It’s China, so does that mean she will be hanged instead of being shot?

Today’s Range 0.9860-0.9900

Michael O’Neill

LoonieViews