Loonieviews September 14, 2012

September 14, 2012
USD/CAD Open 0.9648-53 Overnight Range 0.9648-961

The Canadian dollar extended the post FOMC gains, managing to flirt with the strong USD support line at 0.9640, a break of which will lead to 0.9440. Yesterday, Ben Bernanke set sail on the good ship, QE3 in a blatant attempt to devalue America to prosperity. Overseas, the quickly falling US dollar forced Japan’s Finance minister to suggest that intervention is in the cards. In Europe, the economic outlook is more positive as the EU and the ECB appear to be making headway towards resolving the debt crisis. An EU Finance Ministers meeting starts today with Greece and Spain on the agenda. Meanwhile global equity indices and NY equity indice futures are all higher. WTI oil has cracked $100/bbl, trading at 100.10. Rising middle east unrest is helping. Gold is at$1,732.90.

Today’ US data releases include : CPI (Aug. 1.6%, YoY, ex food/energy 2.0% YoY) Retail Sales (Aug 0.7%, MoM, ex autos 0.6%), Industrial Production (0.0) Michigan consumer Sentiment (74.0)

The USD/CAD technicals are bearish following the break of key support at 0.9740. A break of this level will see further gains to 0.9440 and possibly and extension to 0.9020 (100% FIBO retracement of 0.9420-1.0620 of June-October 2011 range) For today, USD support is at 0.9640 and 0.9610. Resistance is at 0.9680, 0.9710 and 0.0740.

The impact of today’s US data releases is likely to be diminished as traders continue to analyse the impact of QE3 and fret about the EU Finance ministers meeting. In addition, the post FOMC US dollar sell-off may be a tad overdone as it wasn’t entirely unexpected. A modest correction may occur today on position trimming ahead of the weekend.

And in other news, a new species of monkey with a distinctive blue bottom was discovered in the Congo, according to researchers. Coincidently, a new exotic meat dish has arrived on the menu at a Beijing restaurant.

Today’s Range 0.9640-0.9740

Categories FX, Foreign Exchange, Currency, Canadian Dollar

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