Saturday, July 17, 2010
The JPY outperformed on the view for a US slowdown
USD/CAD. Breaching above the recent 1.03-1.04 range
USD/CAD (1.0429) is up overnight and breaching the 1.03-1.04 range it plied most of the week.
Trend: Daily lower; weekly lower.
Overbought/Oversold (stochastics): Daily neutral; weekly neutral.
Support/Resistance Levels: Resistance lies at 1.0467 (Jul16 high), 1.0677 (Jul5,6 high), 1.0680 (Jun high), 1.0853 (May25 high) and 1.1725 (Jul’09 high). Support lies at 1.0277 (Jul13 low), 1.02 (psychological), 1.0139 (Jun21 low), 1.0110 (May13 low), 0.9931 (Apr21 low), 0.9825 (May’08 low), 0.9712 (Feb’08 low), 0.9058 (Nov’07 low).
The CFTC, non-commercial, net position fell to 11K and is threatening the uptrending channel it has traced out in recent months.
The risk reversal (3m, 25delta) ticked higher overnight along with the rally in spot.
Implied Vol (3m) is down slightly, and it lies near the middle of it’s range so far in 2010.
Cross-asset valuation: In terms of other assets correlating with USD/CAD, watch the SPX (negative), CRB (negative), crude oil (negative), and the 2yr spread (negative).