Daily Winners and Losers
The Canadian dollar remained unchanged against the greenback in overnight trade after testing at the 0.9590 support level in London. The loonie was able to stay afloat despite broad dollar strength, with the greenback advancing against all the majors save the Canadian Dollar. Yesterday’s weaker than expected housing starts saw the USD/CAD pair test the upper bound trend line of the wedge formation that has held since the start of the month. The loonie was able to break below trend line support early in pre-market trade, but quickly pared gains ahead of the US open. Downside targets for the pair are eyed at 0.9590, with subsequent floors seen at 0.9560 and the 0.95-handle. Resistance starts at 0.9645, followed by the upper-bound trend line, currently at 0.9685, and the 0.97-figure. Traders will be eying economic data tomorrow with the international merchandise trade report expected to show a gain of CAD$ 0.5B in March.
The Swiss Franc was the worst performer against the greenback overnight after the April CPI report showed inflation slowing to just 0.1% m/m in April, while the year on year figure printed at just 0.3%. The data grossly missed estimates and fueled concerns about possible deflation in the Swiss economy. With interest rates already at historic lows, traders jettisoned the swissie with the pair testing the 0.88-handle early in European trade. A breech here sees subsequent ceilings at the 38.2% Fibonacci retracement taken from the April decline at 0.8850 and 0.8920. A glance at a 4-hour chart of the pair reveals divergence in the RSI indicator, suggesting there may be further losses ahead for the swissie. Interim support rests at 0.8760 backed by the 23.6% retracement at 0.8735 and 0.8710. A break below this level risks dollar losses to the 0.8640 support level.
Key Levels/Indicators
Level/Indicator | Level |
50-Day SMA | 0.9020 |
20-Day SMA | 0.8793 |
10-Day SMA | 0.8696 |
2011 High | 0.8551 |
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