May 14, 2010
USD/CAD Open 1.0249-54 Overnight Range 1.0196-1.0271
The CAD$ slid lower overnight, once again caught up in risk aversion trading as relentless selling of EUR/USD continued on fears that the Euroland debt crisis will undermine economic growth. In addition, EUR/USD technicals played a role as a widely reported EUR/USD barrier at 1.2500 gave way, leading to stop loss EUR/USD selling. Gold surged to $1,249.70, oil dropped to $73.05 and global equity futures were all down. There is a ton of US data releases today including: Retail Sales (Forecast 0.3%, ex auto’s 0.5%), Industrial Production (0.4%), Capacity Utilization (73.6), Michigan Confidence (74.0) and Business Inventories (0.7).
The short term CAD$ technicals are bearish. The failure to extend gains through 1.0110 coupled with the break back through 1.0230 targets 1.0385. For today, USD support is at 1.0230 and 1.0190 with resistance at 1.0320 and 1.0380.
Yesterday’s CAD strength in the face of general USD strength vs. the majors may have been in part due positive sentiment from announced M&A activity and in part due to the reloading of short EUR/CAD positions, which may have been stopped out last Thursday/Friday. However, CAD downside should be limited due to a) prospects of rate increases beginning in June b) generally robust economic fundamentals c) CAD buying as a proxy to US dollars.
Today’s Range 1.0210-1.0310
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By Admin | May 27, 2010 | Daily Update | 0 comments