September 7, 2012
|USD/CAD Open 0.9818-23 Overnight Range 0.9808-0.9833
The Canadian dollar held on to yesterday’s gains following Mario Draghi’s press conference which confirmed an ECB bond buying program. The EUR rose vs. the majors and global equity indices also climbed. Overnight, FX markets just spun their wheels awaiting the release of the US payrolls data. (Forecast 125K; UE rate 8.3%) Canadian employment data is also released (Forecast +10k, UE rate 7.3%) Global equity indices including NY equity futures are all higher. Gold is $1,698.50 and WTI oil is $95.87.
The USD/CAD technicals are bearish USD. The break of the USD/CAD support zone in the 0.9840-60 level led to CAD$ gains towards 0.9800. If (when) this level is breached the USD will extend losses to 0.9740 with 0.9440 achievable. A move back through 0.9860 should lead to further 0.9800-0.9940 consolidation. For today, USD support is at 0.9800, 0.9770 and 0.9740. Resistance is at 0.9840, 0.9860 and 0.9910.
The Canadian dollar rally has been precipitated by overall US dollar weakness, in part due to the euro zone developments but also anticipation of what many believe will be QElll. If today’s US payrolls number surprises to the upside (ie. +150K) the USD should recoup a lot of this weeks losses. However, the loonie should be relatively insulated because an improving outlook for the US economy is generally good for the Canadian dollar. In addition, selling of EUR/CAD and anticipated demand from pending M&A activity, will put a cap on CAD$ losses.
And in other news, a 72 year old Swedish man died while having a tumor removed from a kidney because the anesthetist and nurse left the operating room to go for lunch. A Big Mac attack claims another victim
Today’s Range 0.9770-0.9860