September 5, 2012
|USD/CAD Open 0.9877-82 Overnight Range 0.9853-0.9891
The Canadian dollar dodged a bullet overnight (as did the new premier of Quebec) when the separtiste, PQ party in Quebec, only managed to snag a minority government. Quebeckers opted to elect a party that wants to separate from Canada rather than keep the incumbent Liberals who merely wanted to separate taxpayers from their cash. Elsewhere positions were realigned ahead of tomorrow’s ECB meeting and hopefully details on Draghi’s plans to fix the sovereign debt issue. Friday’s US payrolls data and next week’s FOMC meeting provide enough event risk to keep traders close to home. The Bank of Canada will leave rates unchanged today and the following statement will likely allude to softening global growth with risks to the downside. Asian equity indices closed down, European indices are currently higher while NY equity indice futures are flat to slightly down. WTI oil is $95.30 and gold is $1,692.80
The short term (hourly) USD/CAD technicals are bearish USD. The USD/CAD needs to stay below 0.9890 to set up further tests of 0.9840. A move above 0.9890 sets up further 0.9840-0.9960 consolidation. For today, USD support is at 0.9850 (overnight low), 0.9840 and 0.9810. Resistance is at 0.9890, 0.9920 and 0.9940.
Once again, domestic economic data releases will be largely ignored while the markets await quantitative easing decisions from the FOMC and the ECB. In addition, the ever increasing risk of military action against Iran and the growing political instability in the entire middle East appears to be off the radar screens.
And in other news, McDonalds has opened up is first two vegetarian restaurants in India. Holy Cow!
Today’s Range 0.9840-0.9890