Loonieviews December 5, 2012

December 5, 2012

USD/CAD 0.9918-23 Overnight Range: 0.99111-0.9933

The USD/CAD rate continues to probe support in the 0.9920 area, touching 0.9913 in the European session before backtracking as fast Justin Trudeau on the long gun registry. A mild “risk-on” theme got going in Asia after official comments from China that they would continue to manage economic policies to ensure stable growth. What else could they say?- (“we will manage the economy into the ground”). A mildly disappointing Spanish auction took the “bloom of the rose” in Europe, sending EUR/USD retreating from a 1 month high. US factory orders and ISM non-manufacturing are due from the US at 10: am. Global equity indices and NY equity index futures are all in the green. WTI oil is $88.55 and gold is $1,698.62

The short term USD/CAD technicals are bearish within the confines of a narrow trading band (0.9910-0.9950 (as seen in chart below). A break either side of this band only gives .0050 points. For today, USD support is at 0.9915 and 0.9900. Resistance is at 0.9935 and 0.9950

Yesterday, the Bank of Canada left interest rates and their statement unchanged. Somewhere, somehow, someone started suggesting that the Bank of Canada would shift gears and remove any reference to higher rates in the statement. This proved bogus as the statement continues to include “Over time, some modest withdrawal of monetary policy stimulus will likely be required, consistent with achieving the 2 per cent inflation target.” Canadian interest rates aren’t going anywhere for at least a year. The Canadian dollar rate remains driven by Europe debt issues, US Fiscal Cliff yammering and Chinese economic growth.

And in other news, Canadian engineers are part of an international team working to develop a toilet that makes human waste disappear without piped water, sewers or electricity. Most were recruited from the Rumpelstiltskin’s Straw Spinners Inc.

Today’s Range 0.9910-40

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


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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