USD/CAD Open 1.0603-08 Overnight Range 1.0578-1.0625
The CAD$ is under pressure due to another round of risk aversion trading as weak economic data sparks renewed fears of a double dip global recession. Today’s US data releases which include Case-Schiller home prices, Chicago PMI and consumer confidence are expected to provide further evidence of a slowing economy. Global equity indices are all lower as are US futures. Commodity prices are also down. In addition, month end rebalancing flows will also weigh on the loonie.
The short term CAD$ technicals are bearish. The break of 1.0575 has opened up a test of 1.0675 and if this level is broken, further weakness to 1.0870 cannot be ruled out. For today, USD support is at 1.0570 and 1.0540. USD resistance is at 1.0640 and 1.0680.
The prospect for weak data and month end rebalancing flows in conjunction with weak global equity markets points to a nasty day for the loonie, especially if 1.0675 is taken out.
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Today’s Range 1.0590-1.0675
Rahim Madhavji | Knightsbridge Foreign Exchange
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