January 22, 2013
USD/CAD 0.9937-42 Overnight Range: 0.9909-0.9941
The Canadian dollar is on the defensive with the US dollar probing resistance at the 0.9940 area. Overnight, the Bank of Japan delivered on the rumours of raising the inflation target to 2% but disappointed traders with news that the open ended asset purchase program wouldn’t start until January 2014. USD/JPY took a beating on buy the rumor, sell the fact trading. The European trading session was rather lively 9except for USD/CAD traders) with numerous rumors roiling markets until a better than expected ZEW (Expectation of economic growth) survey (31.5 vs forecast of 12.0) gave the EUR/USD a boost. The Asian equity indexes (except Nikkei) posted gains) while European equity indices declined and NY equity index futures are also pointing lower.
The short term USD/CAD technicals are bullish, looking for further gains to 0.9980 and then 1.0060 following the break of the downtrend line at 0.9880. For today, USD support is at 0.9910 and 0.9880. Resistance is at 0.9950, 0.9960 and 0.9980
And in other news, a BC Transit cop ‘accidently” left an explosive device on a commercial aircraft following a dog training exercise on the plane. He didn’t realize that the explosive was missing for two days and by then the plane had already flown to Toronto. Apparently, the lesson that authorities were attempting to impart was “You probably shouldn’t do this”
Today’s Range 0.9920-0.9960
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Vice President, FX Trading