LoonieViews August 21, 2012

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


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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