LoonieViews August 10, 2012

August 10, 2012
USD/CAD Open 0.9932-37 Overnight Range 0.9910-41

The Canadian dollar failed to extend yesterday’s gains through support in the 0.9905-10 zone, but did manage to keep most of this week’s gains in the face of a modestly resurgent US dollar vs the majors. The evening session started out with a negative tone with the release of surprisingly weak Chinese export data which provided support for the view that the global economy is slowing. Asian Equity indices ended the day lower. The global slowdown theme continued in Europe aided in part by pessimistic growth report from Germany. In addition, GBP came under pressure over concerns of renewed stimulus activity. This news served to drive European equity indices lower as well as NY equity indice futures. WTI Oil is $92.33/bbl and gold is $1,610.13 Canadian employment data is released today (Employment change +6k, Unemployment Rate 7.2%)

The short term USD/CAD technicals are bearish USD. A break below 0.9905-10 suggests a return to 0.9800. For today, USD support is at 0.9905, 0.9880 and 0.9860. Resistance is at 0.9940, 0.9960 and 0.9980

The recent employment reports from Australia and the US substantially beat expectations giving the respective currencies a boost. Perhaps, the same fate awaits the Canadian dollar. If we get jobs gains north of 60K today, we will be probing support at 0.9800 quickly. Don’t be shy, the Loonie is a buy!

And in other news, a Michigan police officer visiting Calgary during the Stampede wrote a letter to the editor of the Calgary Herald. In essence, the cop complained that Canada’s ridiculous gun laws, (which banned him from carrying a weapon) prevented him from shooting two young man who had the audacity to ask him” have you been to the Stampede, yet?” when he was walking in a park with his wife. It would seem that in Michigan, “ Have a nice day” means a double tap to the forehead.

Today’s Range 0.9860-0.9960

Michael O’Neill


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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