LoonieViews August 16, 2012

August 16, 2012
USD/CAD Open 0.9889-94 Overnight Range 0.9883-0.9900

The Canadian dollar managed to break below 0.9900 yesterday and stay below that level overnight but additional gains were almost nonexistent in an otherwise painfully dull overnight session. The loonie is benefitting from modestly higher commodity prices including WTI oil ($94.29), an improving US economic data and simultaneously on-going expectations of QE3 in September. The FX majors remain mired in narrow ranges trading in full summer vacation mode, content to await the release of today’s US data. The data releases include: Jobless Claims (365K), Housing Starts (756K), Building Permits (769K), GDP (4.3% YoY) and Philly Fed (-0.5) Global Equity indices were mixed and NY equity indice futures are pointing higher to start the day.

The short term USD/CAD technicals are bearish USD. The USD is testing support in the 0.9880-0.9900 range A break below this level will result in a test of 0.9800. Longer term, a move through 0.9880 opens up a test of 0.9440, the 100% fibo retracement of the 0.9440-1.0658 range. For today, USD support is at 0.9880 and 0.9850. Resistance is at 0.990 and 0.9920.

A modestly positive US growth outlook and an absence of doom and gloom headlines from Europe are giving both the US dollar and the loonie room to rise in a thin summer market.

And in other news, Toronto Mayor Rob Ford will be travelling to Chicago next month and one topic on the agenda will be crime. Year to data, Chicago has had 1,647 shootings to Toronto’s 160.which may give Toronto’s cost cutting mayor the idea that Toronto has far too many cops which may be preventing an effective cull of the local lowlife.

Today’s Range 0.9860-0.9910

Michael O’Neill


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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