Loonieviews October 31


October 31, 2012

USD/CAD 0.9973-78 Overnight Range: 0.9960-9997

The USD/CAD retreated below par yesterday and stayed below that level in a dull overnight session. Hurricane Sandy, Friday’s US employment report and next week’s Presidential election have conspired to reduce liquidity. In the bi-polar world of FX, markets are a tad less risk averse than they were on Monday and Tuesday, supported by hopes that the EU conference call on Greece yields some results. Global Equity indices and NY equity indice futures are in positive territory with lower Manhattan employees expected to wade into work today. Gold is $1,721.00 and WTI Oil is $86.39. Canadian GDP (forecast 1.7% YoY) should have little impact

The short term USD/CAD technical’s are bearish with the move back through the steep uptrend line at 0.9995 which argues for a test of USD support at 0.9950.A USD move back above 0.9990 negates the short term downtrend. For today, USD support is at 0.9950, 0.9920 and 0.9885. Resistance is at 0.9990 and 1.0020

And in other news, an actual headline for a story in the UK Daily Mail reads “Hurricane Sandy forces coffins of the dead to rise up from the ground” I guess in merry old England, they have coffins for the “live” as well.

Today’s Range 0.0.9950-0.9990

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

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Loonieviews October 29, 2012


October 29, 2012

USD/CAD 0.9995-0.9999 Overnight Range: 0.9964-0.9999

The USD/CAD rate probed the 200 day moving average (0.9998) but option barrier defenses held and the USD failed to extend gains. It will be a really quiet trading day due to Hurricane Sandy visiting the US east coast, causing evacuations and public transit shut downs in NYC.. Overnight, trading had a pessimistic bias with concerns that Greek politicians cannot get together on austerity measures, potentially running out of money by Nov. 15. Asian equity indices were flat to down. European equity indices and NY equity indice futures are all down. Gold is $1,710.50 and WTI oil is $85.62. There are no data releases from Canada or the US today.

The short term USD/CAD technicals are bullish looking for a break of the 1.0000-1.0010 zone to extend gains to 1.0040 and then 1.0240. For today, USD support is at 0.9960 and 0.9940. Resistance is at 1.0000, 1.0010 and 1.0040.

The absence of NY traders means reduced liquidity and a heightened risk that vulnerable stops/barriers above 1.0005 get triggered.

And in other news, a man in central China has been sentenced to a year in prison for ringing a bell to end a national college entrance exam too early. Next, year a distant relative of Quasimodo, Quasimoogoogai Pan will be the official bell ringer.

Today’s Range 0.9960-1.0040

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

Michael O’Neill

Vice President, FX Trading

Tél.647-345-9099

LoonieViews October 26, 2012


October 26, 2012

USD/CAD 0.9961-66 Overnight Range: 0.9943-0.9973

The Canadian dollar traded defensively overnight with the US dollar probing the recent highs ahead of what is expected to be, uninspiring US GDP data. The JPY eked out some gains as traders await next week’s expected stimulus announcement. In Europe, falling equity indices helped push the EUR/USD lower in the absence of any upbeat reports on the status of Spain or Greece or Portugal. WTI Oil is down at $85.54 due to increasing supplies and diminishing demand. Gold is at $1,703.80

The USD/CAD downtrend from 1.0430 on June 1, 2012 came to an abrupt end on Oct.18, with the decisive break of the downtrend line at 0.9880. This level will now act as support as the USD/CAD rate see-saws between i0.9880 and the 100 and 200 day moving averages (0.9981 and 0.9998, respectively.

A break above the 200 day moving average puts 1.0430 back into play. For today, USD support is at 0.9930 and 0.9910. Resistance is at 0.9970, 1.0005 and 1.0040.

The Canadian dollar may be vulnerable to further weakness on the back of low oil prices, a weak GDP report from the US and an unwinding of the extremely overbought long CAD$ positions, especially if global equity indices tank.

And in other news, a moose in Northern BC attacked an RCMP car. The moose first broke the front grill and bumper, and then stepped on to the vehicle causing dents to the hood, roof and breaking the windshield," the RCMP said in a release. A warrant has been issued for Bullwinkle.

Today’s Range 0.9910-1.0005

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

Michael O’Neill

Vice President, FX Trading

Tél.647-345-9099

Loonieviews October 25, 2012


October 25, 2012

USD/CAD 0.9913-17 Overnight Range: 0.9903-0.9945

The Canadian dollar stayed within the recent range overnight tracking movements in EUR/USD. Not surprisingly, the FOMC stuck to its stimulus plan which led to a softer dollar. Overnight, it was another tepid drift into risk seeking backed by mere comments (not data)from China’s Ministry of Industry saying that the country’s factory output should grow faster in the last quarter. BoJ easing anticipation helped to keep USD/JPY bid. Stronger than expected UK GDP data, attributed to the Olympics gave sterling a boost before markets settled in to wait for US data, which includes; Jobless claims (forecast 370k), Durable Goods (7.1% MoM’ Core 0.8% MoM) and Pending Home sales (2.1% MoM. Global equity indices including NY equity indice futures are all up. WTI oil is 486.47 and gold is $1,717.20

The short term USD/CAD technicals are still mixed. USD bears believe that USD is bearish while trading below 0.9940 but needing a break of support at 0.9880 to extend the downtrend. USD bulls see the failure to break below 0.9880 as evidence the USD uptrend and look to buy around 0.9890 for a test of the 200 day moving average at 0.9972. For today, USD support is at 0.9910 and 0.9880. Resistance is at 0.9940 and 0.9970

And in other news, the former soc Gen trader, Jerome Kerviel, whose trading acumen garnered a $6.3 billion loss, failed in his bid to reverse his guilty verdict.. He is going to appeal this ruling as well. In addition, he still has to repay the loss. Hopefully French prisons have a higher per diem then Canadian prisons.

Today’s Range 0.9870-0.9940

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

Michael O’Neill

Vice President, FX Trading

Tél.647-345-9099

Loonieviews October 24, 2012


October 24, 2012

USD/CAD 0.9907-11 Overnight Range: 0.9907-0.9926

The Canadian dollar held on to yesterday’s gains in a dull overnight session as markets await today’s FOMC meeting. Disappointing EU area PMI’s and a weaker German IFO business climate reading ahead of ECB president Draghi’s speech before the Bundestag kept the EUR/USD on the defensive. The Bank of Canada releases the Monetary Policy Report (10:30am) followed by a press conference at 11:15am which will put to rest any lingering chatter about rate cuts. Asian equity indices were mixed, European equity indices mostly higher and NY equity indice futures are also in the green. Gold is $1,708.60 and WTI oil is $86.57

The short term USD/CAD technicals are mixed. USD bulls view the retracement from 0.9980 as corrective and are content to buy US dollars above 0.9980. USD bears view the failure to even test the 100 and 200 day moving averages combined with the move back below 0.9940 as evidence that the recent move was merely a correction within the current downtrend.

Today’s FOMC meeting and the Bank of Canada press conference suggest another day of quiet trading with FX markets continuing to take direction from equity markets.

And in other news, State Road 130, between Austin and San Antonio Texas has a posted speed limit of 85 mph, a speed designed to reduce the number of “good ol’ boys” and poorly maintained pick-up trucks from public highways.

Today’s Range 0.9870-0.9940

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

Michael O’Neill

Vice President, FX Trading

Tél.647-345-9099

Loonieviews October 23, 2012


October 23, 2012

USD/CAD 0.9962-67 Overnight Range: 0.9818-0.9918-0.9967

The Canadian dollar is looking wobbly ahead of today’s eagerly anticipated bank of Canada interest rate announcement following another uneventful overnight session. The AUD/USD was a tad softer on rate cut speculation while USD/JPY firmed on talk of further QE. The EUR/USD was off its highs in part due to Moody’s downgrading some Spanish regions although they had left the country rating unchanged last week. Asian equity indices rose but European equity indices were all in the red. NY equity indice futures are also down. WTI oil is $87.64 and gold is $1,710.50.

The short term USD/CAD technicals are bullish while trading above 0.9880, supported by the break of 0.9940, targeting both the 100 and 200 day moving averages around 1.0000. A decisive move above these levels will lead to a spike to 1.0240. Only a move below 0.9880 removes the pressure. For today, USD support is at 0.9940, 0.9910 and 0.9880. Resistance is at 0.9980, 0.9995 and 1.0010.

The Bank of Canada will leave rates unchanged today which is unanimously expected. What’s in question is whether or not the BoC drops the reference to" some modest withdrawal of the present considerable monetary stimulus may become appropriate” line. Speculation that such an action is a precursor to a rate cut has undermined the Canadian dollar in recent days, with many economists noting that disappointing growth data has spurred rate reductions in a number of countries including Australia and so Canada will follow suit.
What everyone seems to be ignoring is that the BoC governor has not reduced his rhetoric about the rising consumer debt levels and the risks that this poses to the Canadian economy. However the semantics and nuances in today’s statement are interpreted, I believe that the Bank of Canada is not contemplating rate cuts and that they are happy with an overnight rate of 1%.

And in other news, Mitt and Barak entertained the world last night as they both tried to convince American voters that they have the solution to the Middle East woes. Unfortunately, the solution appears to be bombing Iran back to the future, a course of action that has many Iranian’s wanting an alternative candidate.

Today’s Range 0.9910-0.9980

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

Michael O’Neill

Vice President, FX Trading

Tél.647-345-9099

Loonieviews October 22, 2012


October 22, 2012

USD/CAD 0.9935-50 Overnight Range: 0.9818-0.9945

The Canadian dollar had a bad day Friday, spanked on a shift into risk aversion as falling equity markets, lower commodity prices profit taking and a perception of stalled progress in EU debt negotiations spooked investors. The CPI data created some concern as that the BoC could lower interest rates on Tuesday or at least remove the wording that says rates could rise at any time. It should be noted that the BoC governor has been continually warning of rising debt levels by Canadian consumers, suggesting that talk of rate cuts is a wee bit foolish. There wasn’t much news of note overnight and FX markets traded quietly. There isn’t any data on tap today from Canada or the USA. Asian equity indices rose but the Aussie index fell. European equity indices were all a notch higher as are NY equity indice futures. Gold is $1,727.30 and WTI oil is $90.61

Technicals: The USD/CAD rate is at a precipice. Will concern that Canada is "anti-investment" translate into CAD$ selling in a risk averse trading environment? Will ongoing EUR/CAD demand supported by bullish technicals propel USD/CAD through a minefield of resistance between 0.9950-1.0000?

The USD/CAD has been in a steady uptrend channel since September 14, currently bound by 0.9807 on the bottom and 0.9980 on the top. The top of the channel is just in front of the 100 day moving average at 0.9996 and the 200 day moving average at 1.0002. This should represent significant resistance. If it breaks, 1.0240 is the next target.

Very late Friday, the Canadian government also announced that they were rejecting the Malaysian state owned Petrobas’s $6 billion takeover bid of Progress Energy saying that it failed the "net-benefit" test. This development has to be making officials at CNOOC a tad nervous, wondering if their $15.1 billion bid for Nexen gets the "okay".

I think the USD/CAD will top out somewhere in the 0.9950-1.0000 level and grind back higher, in part because the rejection of the Petrobas deal is not written in stone. Petrobas has 30 days to amend their offer. In addition, the current aversion trading will likely shift back to risk seeking on any positive headlines from the Eurozone. Sell USD/CAD at current levels with a stop at 1.0010.

And in other news, fumes coming from a toilet at Berlin’s Tegel Airport on Saturday sickened 53 people. Officials are denying reports that the fumes had anything to do with a local weinerschnitzel and lager festival

Today’s Range 0.9910-0.9980

LoonieViews

The content and opinions expressed within this commentary are solely those of the author(s) and are not necessarily shared by Jitney Trade. The data and comments provided herein are for informational purposes only and must not be construed as an indication or guarantee of any kind of what the future performance of the concerned markets will be. There is a substantial risk of loss in trading commodity futures, options and foreign exchange products and is not suitable for all investors. Contact your account representative for more information on these risks. Information and opinions contained herein come from sources believed to be reliable but are not guaranteed as to accuracy or completeness. Please carefully consider your financial condition prior to making any trading decisions.

Michael O’Neill

Vice President, FX Trading

Tél.647-345-9099