Price action in Usd/Cad has been the most interesting this morning with the currency rallying ahead of the morning event risk and spiking to daily highs at 1.2845 just after, before reversing sharply to weekly lows below 1.2700. Indeed the unemployment data was much weaker surging to a 6-year high, but the Canadian Dollar is now the second best performer on the day behind Kiwi, as the on the whole better than expected US data has once again bolstered investor sentiment and sparked a fresh round of risk buying. Comments from Canada FinMin Flaherty could also be helping to prop the Canadian Dollar after stating that Canada is “relatively well off.” Meanwhile US equities have managed to hold onto gains and are tracking slightly higher thus far. Elsewhere, ECB Stark and French Econ Minister Lagarde were on the wires echoing earlier anti-protectionist sentiment from European colleagues. This has become an escalating point of contention between the US and Europe and should be an interesting debate at the upcoming G20.
ANALYSIS OF SELECTED CROSS RATES
Eur/Chf – The surge over the past few days now looks to be overdone and daily studies are confirming with the RSI falling just shy of 70 and the market stalling out by the 61.8% fib retracement off of the 1.5885-1.4580 major December-March move. A close at or near opening levels should also set up a bearish gravestone doji-like formation and open the door for deeper setbacks into the early week. Strategy: SELL @1.5260 MONDAY (PROVIDED FRIDAY’S 1.5265 LOW HOLDS) FOR A 1.5000 OBJECTIVE, STOP @1.5415. STOPS TO BE TRAILED TO COST ON A BREAK BELOW 1.5200.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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