January 16, 2013
USD/CAD 0.9869-74 Overnight Range: 0.9838-0.9877
The Canadian dollar traded below 0.9850 for most of the Asian session but once the US dollar climbed above 0.9850, the Canadian dollar eroded, currently flirting with the solid US resistance zone of 0.9870-90. Yesterday’s EUR selling on Junker’s remarks flipped to EUR buying on the ECB’s Nowotny’s comments, proving that FX markets lack any conviction. Global equity indices including NY equity futures indexes are all lower. Today’s US data releases include: CPI (forecast flat, ex food and energy 0.2%) Industrial Production (forecast (0.3%) Capacity Utilization (78.5%) WTI oil is $93.28 and gold is $1,675.07
The short term USD/CAD technicals are slightly bullish while the US dollar is trading above 0.9840, looking for a break of resistance in the 0.9870-90 area to extend gains to 0.9920. A move back through 0.9840 suggests further consolidation is in store. For today, USD support is at 0.9840 and 0.9820. Resistance is at 0.9880, 0.9890 and 0.9920.
And in other news, Wal-Mart has announced plans to spend$50 billion over ten years in a new “buy American” strategy aimed at getting Americans working again. China is upset at losing jobs to a low income country, especially since thousands of workers will have to return to kindergarten.
Today’s Range 0.9830-85
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Vice President, FX Trading