Loonieviews January 24, 2013


USDCAD Open 1.1070-75 Overnight Range 1.1056-1.1135

The USDCAD retreated under the onslaught of what is being described as stampede into safe haven trades, particularly against JPY and CHF. USDJPY has plunged from 103.58 to 102.18 but keep in mind, buying USDJPY was considered the :no-brainer" trade since the beginning of November. There is a real risk that this move is confusing a long overdue correction for risk aversion with "facts’ spouted to fit the move. AUDUSD got hammered after the WSJ reported comments by a RBA board member saying" 0.8000 was a fair rate". Canadian CPI will be important data for loonie traders. The forecast is for a rise to 1.3%, y/y but judging from the concerns expressed in the BoC statement, I suspect it may be below forecast. Global equity indices are all down including NY equity index futures. Gold is $1,260.10 and WTI oil is $96.77/bbl

The short term USDCAD technical are bearish while trading below1.1120 with a move below 1.1050 opening up a move to 1.1020 and then 1.0990. Above 1.1120 argues for another run at 1.1175 and then 1.1225. Below 1.0990 could lead to a deeper correction to 1.0950

Today’s Range 1.1065-1.1165

Categories FX, Foreign Exchange, Currency, Canadian Dollar

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