LoonieViews September 28, 2012


LoonieViews
September 28, 2012
USD/CAD Open 0.9800-05 Overnight Range 0.9784-0.9810

The Canadian dollar recouped some of its recent losses overnight as US dollar demand for month and quarter end rebalancing fizzled out, China pumped liquidity and Spain appeased jittery investors. The USD dropped vs the majors (except JPY) as traders edged into risk seeking trades. For Canada, GDP will be the highlight of the day, forecast at 2.0%. The US releases: PCE (Core 1.6%, YoY), Chicago PMI (53) and Michigan consumer sentiment (79) Asian equity indices were mixed with the Nikkei down but the Hang Seng and the ASX 200, higher. European equity indices and NY equity indices futures are both in the red. Gold is at $1,784.24 and Oil $92.29

The short term USD/CAD technicals are back to bearish and in concert with the longer term USD/CAD downtrend. The USD/CAD drop below 0.9810 is suggesting a top is in place at 0.9850, which will be confirmed by a move through 0.9770. For Today, USD support is at 0.9870 and 0.9740. Resistance is at 0.9810, 0.9820 and 0.9850

The Canadian dollar appears to have dodged a bullet, successfully fending off a US dollar attempt at cracking strong resistance at 0.9850 which if broken, would have led to 0.9840. There is still a risk for another last minute CAD$ sell-off due to rebalancing or on the back of a horrible GDP print, but otherwise, the loonie is likely to begin grinding higher.

And in other news, an Idaho fisherman discovered a human finger inside a trout that he caught. Investigators originally thought that it was a genetically modified species created for TGI Friday’s finger food menu, but further investigation led them to an unlucky wake-boarder, who suffered a nasty accident. In an aside, the angler was heard to say “mmmmm, finger lickin’ good”

Today’s Range 0.9740-0.9810

Michael O’Neill

LoonieViews

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LoonieViews Sept. 27, 2012


LoonieViews
September 27, 2012
USD/CAD Open 0.9824-29 Overnight Range 0.9822-0.9852

The Canadian dollar remains wobbly on the cusp of month and quarter end as rebalancing flows combined with uncertainty surrounding Spain have traders drifting toward US dollars. US data releases today include; Jobless claims (forecast 378K), GDP (forecast 1.7% Q2) and Durable Goods (-5.0). Global equity indices including NY equity futures indices are all higher.

The short term USD/CAD technicals are bullish but have hit a wall at 0.9855-60. If broken, it should lead to 0.9940. If the USD/CAD rate moves back through 0.9780, the counter trend bullish USD move will be negated. For today, USD support is at 0.9810 and 0.9780. Resistance is at 0.9860, 0.9890 and 0.9940

The massive $15.1 billion all cash offer by CNOOC for NEXXEN is approaching its closing date. It needs to receive Canadian government approval to close. Equity traders aren’t sure that the approval is forthcoming and NEXXEN is trading below the takeover price. In the face of this uncertainty, it is not unreasonable to assume that CNOOC hasn’t accumulated more than 1/3 of their CAD$ requirements. leaving them to scramble if (when) they get the go-ahead

According to a BIS survey on currency trading volumes in 2010, EUR/USD trading volumes are roughly 6 times the volumes of USD/CAD. Therefore a big “one-off” order in a “small currency can have a major impact. The first chart below shows the effect of the ALCOA/ALCAN $19 billion deal in the Sep-Oct 2007. (WTI oil spiking to $140, didn’t hurt, either) The next chart projects the effect of the CNOOC demand for CAD$. BUY CAD$-WEAR DIAMONDS!!

CHART 1

CHART 2 –DÉJÀ VU ALL OVER AGAIN?

And in other news, a Branford area man is the proud winner of $725,274 on a perfect 15 for 15 Pro-line NFL ticket. It is not known if he is any relation to the refereeing crew of the Seattle/Green Bay packer game

Today’s Range 0.9810-0.9890

Michael O’Neill

LoonieViews

LoonieViews September 26, 2012


LoonieViews
September 26, 2012
USD/CAD Open 0.9807-12 Overnight Range 0.9803-24

The Canadian dollar appears to be on the defensive as it bumps up against USD resistance at 0.9820 ahead of month end/quarter end. Federal Reserve Bank of Philadelphia, governor Charles Plosser declared that the recent round of stimulus probably wouldn’t boost economic growth. These comments helped to keep yesterday’s equity selling pressure alive in Asia. Europe awoke to a General Strike in Greece to protest austerity measures and a host of Spanish problems including, rising bond yields, concern surrounding the pending budget release and announcements of structural reforms. A snap election by the Catalonian government fueled fears that Spain’s economic plan could be derailed. All this noise provides justification for traders to book profits ahead of quarter end.

Global equity indices were all down and US equity indice futures are flat to lower to start. WTI Oil is $90.73 and gold is $1,766.40

The short term USD/CAD technicals are bullish but struggling to overcome resistance at o.9820, a break of which should lead to a test of 0.9950. For today, USD support is at 0.9780 and at 0.9760. Resistance is at 0.9820, 0.9850 and 0.9890

The Canadian dollar is likely to be sold on profit taking ahead of the September quarter end, providing an ideal opportunity for traders to front run the massive CNOOC/Nexxen energy order. The Chinese company has likely already received tacit approval for the deal by the federal government and may need to step up CAD$ purchases ahead of the Q4 closing. Sell USD/CAD around 0.9850 and again at 0.9930, looking for 0.9440. Stop above 1.0120

And in other news, many Toronto City councillors were sporting big shiny buttons that read “I am a little sucky kid who whines and cries and moans… and a pathological liar”. I am confused. If they are pathological liars, does that mean that they are lying when they say““I am a little sucky kid who whines and cries and moans? The evidence states otherwise.

Today’s Range 0.9780-0.9850

Michael O’Neill

LoonieViews

LoonieViews September 25, 2012


LoonieViews
September 25, 2012
USD/CAD Open 0.9803-08 Overnight Range 0.9755-0.9808

The Canadian dollar traded quietly overnight, opening in North America right where it started the day, yesterday. There was nothing of note for FX markets to trade off, yet the US dollar scraped out very modest gains against the majors. Commodity prices, except gold are slightly firmer. WTI oil is $92.27 and gold is $1,768.00. Asian equity indices were higher (Nikkei and Hang Seng) while the Aussie ASX200 was down. European indices are mixed to mostly down and NY equity indice futures are up. Canada releases retail sales (forecast 0.1% MoM; ex-autos .2%)

The short term USD/CAD technicals are unchanged from yesterday. A decisive break through strong resistance at 0.9810 should see gains extended to 0.9950. A move below 0.9770, would suggest a “triple top” is in place in the 0.9810-20 area suggesting a retest of 0.9640. For today, USD support is at 0.9770 and 0.9740. Resistance is at 0.9820 and 0.9850.

The Canadian dollar appears to be more vulnerable to further weakness going into month end and quarter end, a risk exacerbated by the high open short USD positions as reported by the Commitment of Traders report last week.

And in other news, a New Zealand man arrived at an Auckland Hospital with a strange complaint, which on further investigation revealed an eel in his anus. Maybe the eel was searching for Richard Gere’s gerbil.

Today’s Range 0.9780-0.9850

Michael O’Neill

LoonieViews

Loonieviews September 24, 2012


LoonieViews
September 24, 2012
USD/CAD Open 0.9803-08 Overnight Range 0.9755-0.9808

The Canadian dollar eroded steadily overnight, undermined in part by the AUD/USD retreat due to expectations of slowing demand from China. In addition, the CAD$ is vulnerable to the usual month end, quarter end selling pressures. FX markets began the week concerned about Merkel and Hollande disagreeing over the implementation of EU bank oversight and whether or not Spain asks for a bail-out this week. In addition, a worse than forecast German IFO reading (101.4 vs 102.5) encouraged the view that EUR/USD strength may have been overdone and a return to 1.2760 is in the cards. Global equity indices, including NY equity indices futures are lower as is WTI oil ($91.56) and gold ($1,759.20)

The short term USD/CAD technicals are bullish while trading above 0.9780 with a break of the 0.9810-0.9820 area suggesting a spike to 0.9950. A move back below 0.9770 would suggest another short term top is in place and we should get another look at 0.9720. For Today, USD support is at 0.9780 and 0.9740. Resistance is at 0.9820 and 0.9850.

There are a lot of data releases from the US which could lead to additional US dollar buying if they paint a picture of an improving US economy, especially as we head into quarter end, which would keep the loonie on the defensive.

And in other news, a Republic Airlines flight attendant was arrested at the Philadelphia International airport, when she tried to carry a loaded 38 cal. Smith and Wesson revolver, through security. Apparently, when Republic Airlines tells passengers to “turn off all electronics including cell-phones”, they mean it. Make my Day, Dirty Harriet.

Today’s Range 0.9780-0.9850

LoonieViews 20Sep12


LoonieViews
September 20, 2012
USD/CAD Open 0.9785-90 Overnight Range 0.9745-0.9810

The Canadian dollar gave up more ground overnight. The catalyst for the move seems to be a pervasive peevishness of global investors over the lack of meaningful, sustainable global economic growth, which has snuffed out last week’s embers of optimism after QE3. Softer PMI data from China and the Euro zone drove global equity indices and NY equity indice futures lower. Oil prices are down (WTI $91.18) on rising US stockpiles which contributed to the softer Canadian dollar. US data releases today include; Jobless claims (+375k), Markitt Mfg PMI (51.5), leading indicators, Philly Fed Mfg. Survey.

The USD/CAD technicals are bearish while trading below 0.9910 on a daily chart, an area well defended by strong USD resistance at 0.9840 and 0.9880. These defences may be tested shortly with a break of 0.9810, unless the US dollar drops back through the uptrend channel support at 0.9860

For today, USD support is at 0.9760 and 0.9720 while resistance is at 0.9810 and 0.9840

And in other news, an obviously misguided, do-gooder, Pamela McColl, has decided that history needs to conform to her view of reality and has edited the classic “the Night Before Christmas” She is outraged and offended that Santa Claus is fat and smokes, which send the wrong message to “our children”. It is too early to tell if this book criticism will attract the same outrage as a recent movie resulting in murder and mayhem across the globe.

Today’s Range 0.9720-0.9810

Michael O’Neill

LoonieViews

Loonieviews Sept.19, 2012


LoonieViews
September 19, 2012
USD/CAD Open 0.9737-42 Overnight Range 0.9728-0.9755

The Canadian dollar was sidelined overnight. The surprise BoJ stimulus announcement drove USD/JPY higher and gave gold a lift. (1,775.30) However, it looks like FX markets are suffering from stimulus fatigue as the reaction in the rest of the majors was fairly muted. Asian equity indices closed higher, European equity indices are mixed to lower and NY equity indice futures are flat

The USD/CAD technicals are bearish while trading below 0.9920 on a daily chart and remain in the well defined US downtrend channel. The recent dip through the bottom of the channel following the FOMC meeting may prove to be an aberration as the currency pair is trading back inside. The hourly charts are bullish USD/CAD while trading above 0.9725, looking for a break of 0.9760 to extend gains to 0.9790. For today, USD support is at 0.9725 and 0.9705. Resistance is at 0.9760 and 0.9790

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And in other news, something called the Trust for America’s Health issued a report yesterday stating that “Half of America will be Obese by 2030” According to Democrats, the other half will be dead due to the repeal of ObamaCare, if Romney wins the election.

Today’s Range 0.9720-0.9790