October 19, 2012
USD/CAD 0.9868-73 Overnight Range: 0.9846-0.9874
The USD/CAD continued to rally overnight, battering resistance in the 0.9860-80 area, in due to general US strength in the absence of any earth-shattering pronouncements from the EU summits. Asian equity markets eked out gains while European equity indices were mostly lower as are NY equity futures indices. WTI oil is $92.35 and gold is $1,735.40. Existing Home sales (forecast 4.73m) are released in the US. Canada answers with CPI (forecast 0.3% MoM, Core 0.3% MoM)
The short term USD/CAD technical’s are bullish this morning, while trading above 0.9840, arguing for a decisive break through 0.9880 to extend gains to 0.9940. For today, USD support is at 0.9840, 0.9810 and 0.9770. Resistance is seen at 0.9880, 0.9910 and 0.9940.
A lower than expected CPI release today should put to rest any lingering thoughts that the Bank of Canada will be raising interest rates within the next year. In addition, the Finance minister has been busy managing Canadian growth expectations lower.
And in other news, Barry Obama and Mitt (Mittens?) Romney both attended the Alfred E Smith Memorial dinner last evening. The line of the night has to go to Obama who instructed guests “Please take your seats or Clint Eastwood will yell at them”
Today’s Range 0.9840-0.9810
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Vice President, FX Trading