Loonieviews January 18, 2012


USD/CAD Open 1.0125-30 Overnight Range 1.0120-70

The Canadian dollar squeaked out further gains overnight on the back of a short squeezing EUR/USD climbing higher. A report that the IMF is seeking to bump up their war chest to $1 trillion via contributions from China, India, Brazil, Russia and Japan is giving the EUR/USD legs. It is a bit of a stretch to equate a request for funds by the IMF as a signal for happy days ahead in the Eurozone. Greece is still negotiating bond haircuts and Greeks are protesting austerity measures. In addition, Iran is still sabre rattling, raising middle East tensions. However, so far today, Global equity indices and NY equity futures are all higher. Gold is at $1,654.80 and WTI oil is $101.32. US data releases today include PPI (forecast 0.1%, m/m. The Bank of Canada releases its Monetary Policy report.

The short term CAD$ technical’s are bullish while trading below 1.0180 (100 day moving average 1.0179), which will act as resistance today. However, good USD support is seen between 1.0080 and 1.0110. Below 1.0080 targets 0.9920 while above 1.0180 means more 1.0080-1.0400 consolidation. For today, USD support is at 1.0110 and 1.0080. Resistance is at 1.0160, 1.0180 and 1.0210

Canadian domestic economic data will continue to take a back seat to European and US events leaving the loonie at the mercy of “risk-on-risk-off trading.

And in other news, British Air passengers enroute from Miami to Heathrow were awakened at 3:00 am on Friday with an automated announcement that the plane was about to crash into the sea. Even though the message was a mistake, the Italian pilot was reportedly seen parachuting out an emergency exit

Forecast Range of the Day 1.0080-1.0180

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Loonieviews January 17, 2012


LoonieViews January 17, 2012
USD/CAD Open 1.0145-50 Overnight Range 1.0115-1.0188

The Canadian dollar rose with the rest of the G-7 currencies in a lively overnight session, as better than expected Chinese GDP data reduced economic slowdown fears drove the US dollar lower. The S & P downgrades of 9 Eurozone countries were shrugged off as evidenced by falling borrowing costs for Spain and Greece at auctions. Short EUR/USD positions got stopped exacerbating the USD fall. Today’s Bank of Canada rate decision should see rates unchanged at 1%

The short term CAD$ technical’s are bullish having broken support and the 100 day moving average in the 1.0175-80 area, targeting a test of 1.0080. A break of this level should see a move to 0.9890. Only a USD/CAD move above 1.0205 would negate the pressure. For today, USD support is at 1.0110 and 1.0080. Resistance is at 1.0160, 1.0180 and 1.0205

At first blush, a Chinese GDP report o 8.9%, which was lower than the9.1% seen in the previous quarter, would be viewed negatively and certainly not a reason to hop aboard the “risk seeking’ bandwagon. However, it was better than the forecasts (8.7%) and is seen as evidence that Chinese official are able to manage a soft landing, opening the door to lower rates.

And in other news, the Captain of the Costa Concordia, the cruise ship that ran aground off the island of Giglio was merely attempting to “make a bow” to people on the island. Not only did the ship bow, it scraped and then sunk. Oooops.

Forecast Range of the Day 1.0080-1.0180

USD/CAD Open 1.0145-50 Overnight Range 1.0115-1.0188

The Canadian dollar rose with the rest of the G-7 currencies in a lively overnight session, as better than expected Chinese GDP data reduced economic slowdown fears drove the US dollar lower. The S & P downgrades of 9 Eurozone countries were shrugged off as evidenced by falling borrowing costs for Spain and Greece at auctions. Short EUR/USD positions got stopped exacerbating the USD fall. Today’s Bank of Canada rate decision should see rates unchanged at 1%

The short term CAD$ technical’s are bullish having broken support and the 100 day moving average in the 1.0175-80 area, targeting a test of 1.0080. A break of this level should see a move to 0.9890. Only a USD/CAD move above 1.0205 would negate the pressure. For today, USD support is at 1.0110 and 1.0080. Resistance is at 1.0160, 1.0180 and 1.0205

At first blush, a Chinese GDP report o 8.9%, which was lower than the9.1% seen in the previous quarter, would be viewed negatively and certainly not a reason to hop aboard the “risk seeking’ bandwagon. However, it was better than the forecasts (8.7%) and is seen as evidence that Chinese official are able to manage a soft landing, opening the door to lower rates.

And in other news, the Captain of the Costa Concordia, the cruise ship that ran aground off the island of Giglio was merely attempting to “make a bow” to people on the island. Not only did the ship bow, it scraped and then sunk. Oooops.

Forecast Range of the Day 1.0080-1.0180

LoonieViews January 16, 2012


USD/CAD Open 1.0199-1.0204 Overnight Range 1.0193-1.0250

The Canadian dollar recouped some of Friday’s losses overnight in a tepid start to FX trading for the week. S&P downgraded 9 countries late Friday, although rumours of the action were rampant. It would have been news, 18 months ago, but once again the rating agency announcement is as timely as “Lincoln’s been shot”! Nevertheless, the US dollar was in demand as a safe haven. The EUR/USD was under pressure in early Asian trading but recovered somewhat in Europe after reports that the ECB was buying debt from Spain and Italy. Greece will be back in the spotlight later this week as restructuring talks resume. Bloomberg reports that PIMCO’s Bill Gross expects Greece to default. Asian equities were lower while European equity indices are mixed. NY equity futures are also down. WTI oil is $99.40 and gold is $1,644.73. US markets are closed for Martin Luther King Day.

The short term Canadian dollar technicals are mixed to bearish while the USD/CAD rate is above 1.0080. A move through 1.0280 should yield 1.0450 while a rally below 1.0080 opens up a test of 0.9980. For today, USD support is at 1.0180, 1.0160 and 1.0110. USD Resistance is pegged at 1.0230, 1.0250 and 1.0280

The Canadian dollar will remain vulnerable to further risk aversion trading stemming from the fall-out of the S & P downgrade and the heightened risk of a Greek default. The MLK holiday will make for a quiet trading day

Today’s Range 1.0180-1.0250

LoonieViews January 13,2012


January 13, 2012

 

USD/CAD  Open 1.0187-92   Overnight Range 1.0165-1.0195

 

The Canadian dollar had another restful night with the G-7 currencies content to bounce within well defined ranges.  Chinese FX reserves dropped to a mere  $3.18 trillion  on suspected capital flight from EM due to the Europe crisis.  Softer WTI Crude (currently $99. 10) is being blamed on a delayed EU oil embargo to Iran.  The EUR/USD is off its highs in part due to a weak Italian note auction and in part due to pre-weekend profit taking.  US data releases today include Merchandise trade and the University of Michigan confidence survey.

The short term CAD$ technical’s are mixed with something for both bulls and bears.  CAD bulls like the series of lower US dollar highs since touching 1.0515, Nov. 25/11 which suggest a cap at 1.0280 on any CAD$ weakness.  CAD bears are heartened by a series of higher US dollar lows since the beginning of Nov./11 at 0.9920 suggesting limited CAD gains/ US$ losses to 1.0130, supported by rising  moving averages.  For today, USD support is at 1.0160 and 1.0130.  USD Resistance is seen at 1.0195 and 1.0220.

Uncertainty surrounding a sovereign debt resolution in Europe, heightened tensions with Iran and a still wobbly US economy have combined to keep investors sidelined.  Monday’s Martin Luther King Day, holiday in the US should make for a quiet afternoon.

And in other news, US politicians and the media are all in a tizzy over a report that US marines peed on the corpses of a Taliban squad that lost a shooting match.  The US politicians are afraid that the “despicable act” may offend the terrorist band.  Obviously,  the Taliban, known for using children as suicide bombers and mutilating and beheading prisoners, are a sensitive cadre of terrorists and should be coddled by the Americans.

 

Forecast Range of the Day  1.0130-1.0210

LoonieViews Jan. 10, 2012


The Canadian dollar climbed steadily overnight  on speculation that China may be forced to cut rates to stimulate a slowing economy. Meanwhile, another meeting in Europe, this time with Merkel and the IMF gave optimists hope that EU leaders are working toward a debt crisis resolution. The EUR rose vs. the US but it is still below the 2011 low of 1.2711. Bearish EUR technical’s targeting the  1.1800 zone don’t bode well for CAD$ bulls.  Global equity indices are all higher as are NY equity futures.  WTI Oil is $102.63/bbl and gold is $1,629.86

 

The short term CAD$ technical’s are mixed CAD bears see the current retreat from 1.0330 as merely corrective, looking for a move to 1.0420.  CAD bulls are looking for a break of 1.0160 and then 1.0080 to open up a move to 0.9890.  For today, USD support is at 1.0160 and 1.0130.  Resistance is at 1.0210 and 1.0240.

 

The Canadian dollar continues to be exposed to EUR/USD moves and the bearish technical outlook in the EUR suggests that CAD$ upside is quite limited.

 

And in other news, math teachers at an elementary school in Georgia are under fire for using examples of slavery to pose math problems.  i.e. “Each tree has 56 oranges.  If 8 slaves picked them equally, how many would they pick”  The math questions have be revised to:  If  two pasty white math teachers were thrown in a holding cell with 6 Crips, how many new friends would they get on facebook?

 

Forecast Range of the Day  1.0130-1.0210