Loonieviews April 25, 2013

April 24, 2013
USD/CAD Open 1.0227-32 Overnight Range 1.0225-1.0260

The Canadian dollar idled during a quiet Asian session as both Australia and New Zealand were closed for ANZAC Day. The USD/JPY again rejected attempts to push through 100. The dollar retreated a tad in Europe, with GBP/USD spiking higher on better than expected GDP (Q1 GDP +0.3% vs. expectations of 0.1%) avoiding a recession and reducing the need for additional QE. European equity indices are mixed and NY equity index futures are higher. Gold is $1,446.90 and WTI oil is $91.84.

The short term USD/CAD technicals are modestly bearish with the break of 1.0250 but there is plenty of support between 1.0180 and 1.0220 which will slow US dollar losses. For today, USD support is at 1.0220, 1.0205 and 1.0190. Resistance is at 1.0250 and 1.0280

The Canadian dollar has been identified as one of the major currencies will very large short positions (long US$) suggesting that the “smart money” expects further US dollar gains toward 1.0440 and higher. If the USD/CAD fails to extend gains, the dollar will become increasingly vulnerable to a sell-off. Perhaps negative CAD$ sentiment is overdone. For one, Canadian interest rates are not going lower.

And in other news, a thirsty Scotch aficionado, strolled into a LCBO and stuck a bottle of Glenfiddich Single Malt scotch under his coat and hasn’t been seen since. The bottle was worth $26,000. In actual fact, the scotch was likely worth only $10 bucks, the rest of the price was composed of federal and provincial taxes.

Today’s Range 1.0210-50

Michael O’Neill


Categories FX, Foreign Exchange, Currency, Canadian Dollar

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