USD/CAD Open: 0.9945-49 Overnight Range: 0.9941-1.0051
The Canadian dollar rocketed higher overnight and broke past parity gaining vs. the USD. The EUR, AUD, and CAD are all higher vs. the USD. Overnight, sigs that a debt deal was completed boosted eurozone equity markets and overall risk sentiment. Oil is at $92.84 and gold is at $1,728. NY futures are pointing higher today. Today, US GDP data and weekly jobless claims data are released.
The short term Canadian dollar technicals will turn bullish should the loonie close past parity. For today, USD resistance is at 1.0057, 1.0131, and 1.0213. Support is at 0.9920, 0.9881 and 0.9812.
To parity and beyond for the loonie. All eyes are back on the eurozone as policymakers look like they have consensus on a deal, which includes a 50% Greek debt haircut by private investors and a plan to finance Greece within a year. The eurozone rescue fund could increase to as much as $1.2 trillion after including leverage and a plan is in place to recapitalize banks. Equity markets are sharply higher as risk is on in full swing as the details released look substantial enough to stop contagion. It appears that traders believe that this time this plan is for real and with the eurozone contagion concern potentially out of the way, it will allow risk currencies to move higher. Despite all the negative headlines of late, the economy continues to muddle along. The focus will soon shift to economic fundamentals and outlook on the US and global economy. It will be interesting to see if any other parties come forward and ask for a writedown of their bad debt holdings asking for similar treatment as Greece debt. As we have seen before, this is not the first time eurozone issues seem to be controlled only to have a surprise shock to the market. Look for the loonie to continue its uptrend but watch for shocks from the eurozone incase pockets of turbulence arise from the implementation of this new plan.
Today’s Range: 0.9880 – 0.9990
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