Loonieviews October 31, 2013


original post on Saxo Bank’s Trading Floor

FOMC shows dovish fangs as subtle shift in stance sees USD relief

The Federal Open Market Committee (FOMC) members obviously ignored the prevailing market wisdom that due to soft economic data and the government shutdown, Wednesday’s meeting would be a waste of time. Many economists, strategists and the like expected a Fed statement virtually unchanged from September’s. Once again they were surprised.

The Fed just "tweaked" the previous statement but the tweaks changed the nuance of the entire report turning it from dovish to dovish with fangs. It read (to me) like it was a little more decisive. Gone is the phrase "but the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labour market" Whether that was worth .0060 points in EURUSD is anyone’s guess.

The statement served to remind global markets that tapering will begin on the FOMC’s agenda and not on the conventional wisdom’s schedule. The flurry of Fed speakers beginning Friday may shed some light as to where the FOMC is with the tapering file.

USD rides the wave

The US dollar made some healthy gains against the majors immediately after the FOMC statement. USDJPY shot from 98.20 to 98.65, EURUSD dropped to 1.3698 from 1.3765, Cable sank to 1.6000 from 1.6055 and USDCAD popped from 1.0450 to 1.0497. Not bad for what had been billed as a benign report.


Loonieviews October 31, 2013


USDCAD Open 1.0452-57 Overnight Range 1.0453-70

Original post on Saxo Bank’s Trading Floor

The USDCAD backed away from breaking resistance in the 1.0270 area in a quiet overnight session as FX traders adjusted positions ahead of the FOMC meeting. If the FOMC members believe the market assessment of this meeting, they sould just skip the meeting and head straight to cocktails. That said, the US Congress, very effectively, sabotaged this meeting by shutting down the government which supports the view of a non-event FOMC meeting. Global equities are all higher, gold is at $1,348.60 and WTI is $97.60

The short term USDCAD technicals are bullish while trading above 1.0430 but need to break 1.0470 to extend gains to 1.0550. A move below 1.0440 could lead to a test of 1.0420 and more 1.0420-70 consolidation..

Today’s Range 1.0430-1.0510

Loonieviews Oct.29


USDCAD Open 1.0432-36 Overnight Range 1.0428-1.043

Original post on Saxo Bank Trading Floor

The Canadian dollar edged higher as did JPY while EURUSD, GBPUSD and AUDUSD all moved lower. The RBA governor was warning that the AUDUSD was too high and in front of the FOMC tomorrow, encouraged a lightening of long positions. Position adjustment ahead of the FOMC seemed to be the theme for Europe as well.

There is a lot of US data to provide a distraction today including Sept. PPI (1.2%), ex-food and energy, yoy), Retail Sales (Oct. 0.1%, mom) and conference Board consumer confidence (75.0 vs 79.7 in Sept.)

Today, Stephen Poloz, Governor of Bank of Canada, testifies before the House of Commons standing committee on finance. Although likely overshadowed by the FOMC meeting tomorrow, this speech can have a negative impact on the Canadian dollar if he continues with the dovish tone from the BOC interest rate statement.

The short term USDCAD technicals neutral within the tight 1.0430-50 range. The bias is slightly bearish looking for 1.0430 to give way to 1.0415 and perhaps 1.0370. A move above 1.0470 puts 1.0510 into play.

Today’s Range 1.0420-50

Loonieviews October 28, 2013


USDCAD Open 1.0440-45 Overnight Range 1.0426-1.0450

Original post on Saxo Bank’s Trading Floor

The USDCAD is hovering near the overnight highs in a slow start to the week as traders await US Retail Sales tomorrow and the FOMC Wednesday. Both EUR and GBP are below their recent highs vs the USD suggesting a pause in the dollar sell-off until the FOMC statement is released. Global equities are still happy with the extension of QE, gaining in Asia, most of Europe and lifting NY equity futures. Gold is at $1,352.40 and WTI is 97.90/bbl. US data includes; Industrial Production, Pending Home sales, and Dallas Fed Manufacturing Business. There isn’t anything from Canada.

The short term USDCAD technicals are bullish while trading above 1.0410 but the US dollars rise appears to have stalled ahead of resistance at 1.0470. For today, USD support is at 1.0430 and 1.0410. Resistance is at 1.0455 and 1.0470

Today’s Range 1.0430-60

Loonieviews October 25, 2013


USDCAD Open 1.0440-45 Overnight Range 1.0412-1.0454

Original post on Saxo Bank’s Trading Floor

The USDCAD played catch-up with the majors, blowing through mild resistance at 1.0420 to test 1.0455. EURUSD and GBPUSD consolidated recent gains while USDJPY dipped below 97.20 to blow weak stops and then recovered. German IFO data was a tad soft but didn’t seem to have much impact in EUR trading. Today’s September US Durable Goods data(forecast 2.0) may have a bigger impact if it encourages a dollar rally and profit taking. Global equity indices were mixed but NY equity index futures are up on the back of strong earnings from Microsoft and Amazon.

The short term USDCAD technicals are bullish while trading above 1.0370 but lack of follow through above 1.0455 suggests a short term pull-back. A move below 1.0430 will see a return to 1.0405 which is guarding 1.0370.

Today’s Range 1.0400-1.0440

Loonieviews October 24, 2017


USDCAD Open 1.0400-05 Overnight Range 1.0369-1.0405

Original post on Saxo Bank’s Trading Floor

The USDCAD not only held on to yesterday’s gains but managed to squeak above 1.0400. Elsewhere, FX trading was robust even though the previous ranges remain intact. EURUSD suffered a little hiccup when Euro zone PMI’s disappointed (slightly) but it has since recovered. Markets are waiting for the US data which includes jobless claims and Markit PMI. There aren’t any Canadian releases. Global equity indices rose (except for the Hang Seng) and ny equity index futures are also higher. WTI is $93.27/bbl and gold is $1,337.70

The USDCAD technicals are bullish while trading above 1.0335 and the break above 1.0370 targets 1.0440. Only a move back through 1.0335 would negate the upside push. Intraday, a dip below 1.0390 could see further losses to 1.0365. Resistance is at 1.0405 and 1.0415.

Today’s Range 1.0375-1.0415

Loonieviews October 23, 2013


USDCAD Open 1.0321-25 Overnight Range 1.0284-1.0336

Original post on Saxo Bank’s Trading Floor

The USDCAD traded like a floating currency overnight, rising from 1.0284 in early Asian trading before coming to life and spiking to 1.0335 resistance, which held. The catalyst is reportedly the rise in a Chinese money market rate (which I’m sure is on everyone’s radar screen) supposedly spooking traders into buying yen against the US dollar and the majors. Or maybe the China rate rise is just an excuse to explain a JPY rally. Global equity indices are all lower and US equity index futures are down as well. WTI oil is at $97.21

Today’s Bank of Canada rate announcement will be followed by the release of the quarterly MPR which is expected to be viewed as dovish.

The short term USDCAD technicals are bullish while trading above 1.0308 but need to break above 1.0335 or else risk reverting to the old standby range of 1.0270-1.0335. For today, USD support is at 1.0308 and 1.0285. Resistance is at 1.0335 and 1.0350

Todays Range 1.0305-1.0335