Loonieviews December 20, 2012

December 20, 2012

USD/CAD 0.9887-92 Overnight Range: 0.9879-0.9892

The Canadian dollar continued to quietly retreat overnight undermined by brinkmanship in the US fiscal cliff talks. In Asia, the BoJ elected to increase its asset purchase fund to the tune of $119 billion dollars. The news was met with JPY buying on profit taking in a “buy the rumor-sell the fact” scenario. Asian equity indices were mixed. The Nikkei dropped while the Hang Seng and ASX 200 had small gains. European equity indices were mostly flat and NY equity index futures are modestly higher. Gold is $1,667.85 and WTI is $90.03. Canada releases Retail Sales (forecast 0.2% MoM). The US releases Jobless claims ( 360K) GDP (QoQ annualized 2.8%), Philly Fed, and Home Sales

The short term USD/CAD technicals are bullish looking for a break of resistance in the 0.9905-10 area to extend gains to 0.9950-60 zone. A good defense of the 0.9905 area is at 0.9887 (100 day m.a) and 0.9890 (200 day m.a) A move back through the 0.9860-70 area would negate the bullish pressure leading to further 0.9830-0.9890 consolidation.

There is a lot of data out today which may add to the volatility in USD/CAD however the fiscal cliff yammering will remain the key currency driver. Trading activity is also likely to be curtailed by the end of the world, tomorrow.

And in other news, a sticky situation got less sticky with news that Quebec police made arrests in the massive Maple Syrup Heist, a caper that threatened to disrupt pancake sales worldwide. There is no truth to the rumor that the felons were arrest outside an IHOP, attempting to sell 4 oz souvenir bottles, freshly filled from a tanker truck. Those people were from Newfoundland.

Today’s Range 0.9860-0.9905 Merry Christmas-Next Loonieviews December 27

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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