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