FX Morning Update September 29, 2011
USD/CAD Open: 1.0308-10 Overnight Range: 1.0280-1.0357
The Canadian dollar was volatile in overnight trading. Yesterday, a heavy selloff in equity markets and commodities prior to close also caused a big selloff in the loonie as traders fled to avoid risk. Overnight, German parliament passed changes to the eurozone rescue fund and this boosted risk appetite. Also, Germany’s labor market remains in good shape despite eurozone issues. NY futures are pointing higher. Oil is at $81.37 and gold is at $1,615. Today, revised Q3 GDP, jobless claims, and pending home sales index data are released. Canada releases GDP data tomorrow.
The short term Canadian dollar technicals remain negative. The USD seems to be attracting buying interest on dips. For today, USD resistance is at 1.0250, 1.0350, 1.0379, 1.0450, and 1.0510. Support is at 1.0213, 1.0131, 1.0091, and 1.0025.
Traders continue to remain worried that eurozone policymakers are always one step behind in terms of solving the eurozone debt issues. Eurozone business confidence is weaker and these persistent negative headlines and lack of clear outcomes can only be negative for eurozone growth creating more pressure on countries to cutback spending to meet agreed upon targets. Bernanke indicated that unemployment was a national crisis and the FED is ready to act if necessary. Markets continue to see-saw in volatile trading as traders try to determine if the eurozone situation is getting worse or better. Any announcements on global stimulus or further adoption of a larger bailout fund could be positive for risk and the loonie, while disagreement among eurozone members and lack of progress could be positive for the USD.
Today’s Range: 1.0215 – 1.0345
Daily Market | Knightsbridge Foreign Exchange
By Admin | September 30, 2011 | Daily Update |
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