LoonieViews September 25, 2012

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


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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