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