October 18, 2012
USD/CAD 0.9783-88 Overnight Range: 0.9766-0.9790
The USD/CAD held on to yesterday’s gains in an overnight session that appeared biased towards risk seeking. China got the ball rolling with slew of economic data that many believe indicate that the bottom has been seen in China’s 7 quarter economic slowdown. This news, in concert with stronger US data recently plus the EU summit today have global investors tepidly optimistic. Asian equity markets rose but European equity indices are all flat to down (except DAX). NY equity futures indices are flat to down. Gold is $1,743.90 and WTI oil is $91.88
The short term USD/CAD technical’s are bearish but need to break through the strong USD support in the 0.9730-40 zone. Although the predominate trend is bearish US dollars, buying USD/CAD around the 0.9760 area with a stop below 0.9730 may make sense. This currency pair has been locked in a 0.9740-0.9880 range since the beginning of September, with plenty of travel time in between. For today, USD support is at 0.9760 and 0.9740. Resistance is at 0.9810 and 0.9840
The Canadian dollar is garnering a modicum of support from both the rise in commodity prices due to a better growth outlook and better economic data from the US and the possibility of some M&A CAD$ demand lurking in the woods.
And in other news, a U.S resident shot a Canadian border guard at the Peace Arch crossing in Surrey B.C. There is absolutely no indication that the border guard had been “rude, obnoxious, bullying, or antagonistic” thereby deviating from standard procedure.
Today’s Range 0.9760-0.9810
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Vice President, FX Trading