USD/CAD Open 1.0247-52 Overnight Range 1.0249-1.0284
The Canadian dollar drifted higher overnight as the US dollar retreated mildly from earlier peaks. Concern and confusion over the size and timing of the Fed’s next round of quantitative easing and event risk surrounding a series of central bank meetings next week is hobbling traders. (FOMC meeting Nov.2-3; UK and ECB, Nov. 4; Bank of Japan policy meeting which was moved up to Nov.4-5).
In keeping with the Halloween theme, Irish and Portuguese 10 year bonds are scaring investors and yields are approaching the levels achieved at the height of the Sovereign Debt Crisis. Meanwhile, Asian equity indices were mixed to slightly higher, European indices all gained and NY futures are looking positive, to start the day.
The short term Canadian dollar technicals are bearish while trading above 1.0230. A move below this level will spark a retest of 1.0150. For today, USD support is at 1.0240, 1.0230 and then 1.0170. USD resistance is at 1.0280 and 1.0330. Next week is rife with event risk and the start of the last full trading month of 2010. Liquidity is likely to be slimmer than normal as market participants stay on the sidelines.
Today’s Range 1.0240-1.0340
Rahim Madhavji | Knightsbridge Foreign Exchange