USD/CAD Open: 0.9930-35 Overnight Range: 0.9895-0.9936
The Canadian dollar traded sideways overnight holding on to yesterday’s gains. Equities, especially bank stocks, and the loonie had a sharp rally yesterday driven by an announcement in Europe on its sovereign debt plan. Oil is at $92.54 and gold is at $1,738. NY futures are pointing lower today. Today, US consumer spending data is released today.
The short term Canadian dollar technicals are bullish. For today, USD resistance is at 0.9980, 1.0057, 1.0131, and 1.0213. Support is at 0.9920, 0.9881 and 0.9812.
The loonie flew past parity yesterday as the US dollar tanked as some details of a eurozone recapitalization plan were released. Details remain murky and implementation remains the key and therefore downside risks in the loonie remain for those that believe the eurozone is not through its mess. Watch global bank stocks to see how traders continue to feel about the eurozone debt recapitalization plan and equities and the loonie could also rally further if China decides to provide funds in to the eurozone bailout fund. The eurozone plan should buy time for several countries including Greece and the focus may shift to fundamental data, however, many other countries have sovereign debt problems including fiscal budget problems, which are longer term issues that need to be addressed at some point. The loonie should follow equities, oil prices, and overall risk sentiment, and expect volatility to be a little muted as long as there are no surprises from the eurozone.
Today’s Range: 0.9850 – 0.9990
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