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
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Vice President, FX Trading