MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
The as expected rise in the unemployment rate to 8.9% along with the better than expected NFP result have helped to prop investor sentiment into the London fix, with the some more broad based currency buying seen against the Yen and USD. Canadian unemployment data has also impressed, after jobs rose by 35.9k when analysts had been looking for a 50k drop. The Canadian unemployment rate also remained unchanged at 8% versus expectations for a rise to 8.3%. Canadian housing starts were weaker than expected but this failed materially influence price action, with the Loonie rallying to fresh yearly highs against the USD. Meanwhile, on a lesser note, US wholesale inventories were weaker. The Canadian Dollar and the Swiss Franc have been the outperformers against the USD while the Yen and Pound lag. US equities are higher while oil trades close to $58 and gold is relatively flat.
ANALYSIS OF SELECTED RATES
Usd/Cad: We have already issued a sell recommendation in Aud/Usd today and will look to pick up Usd/Cad yet again into the current dip after exiting the trade at cost overnight. Daily studies are highly overextended and the market is due for a material corrective bounce over the coming days. We still see the pair trading in a broader range dating back to the Fall of 2008 and view any opportunities to buy at current levels below 1.2000 as compelling. Strategy: BUY @1.1540 FOR A 1.2040 OBJECTIVE, STOP @1.1290. Stops to be trailed to cost on a break back above 1.1640. Recommendation to be removed if not triggered by NY close on Friday.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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