Daily FX Commentary, December 15, 2011

By Warren Hayhoe,

Columnist, Canadian Money Magazine

Central Trader, Jameson Bank

Expected USD/CAD range: 1.0125-1.0240
Expected GBP/CAD range: 1.5855-1.5980
Expected EUR/CAD range: 1.3600-1.3725
Expected GBP/USD range: 1.5570-1.5725
Expected EUR/USD range: 1.3315-1.3475
Expected USD/JPY range: 77.50-78.20

 
Oil opened at $100.99 currently $100.80

Gold opened at $ 1730.70, currently $1717.50

Morning Observations:

First let me start by apologizing for the laps in the commentary over the past few days. We are doing some shuffling around here in the office and timely distribution of the Morning Commentary has been disrupted. These issues should be concluded before the New Year so please bear with us.

Turning back to financial markets we had a relatively quiet overnight session. Bearish sentiment from yesterday’s romp in commodity markets spilled over into the Asian session before turning a small corner early this morning in Europe on better than expected German data and a Spanish auction deemed ‘successful’. In FX markets the only real notable mover overnight was the Swiss franc which jumped through the crosses (even the EUR) when the Swiss National Bank did not hint at any form FX intervention. As you may know their 1.20 EURCHF ‘target’ was rumoured to be increased to 1.25 or even 1.30 but in the absence of any further action the franc ran ~1% higher in minutes. Aside from that it was a bit of a sleeper in currencyland as commodity prices have stabilized from yesterday afternoon’s base. The recent run on the US dollar has put pressure on gold prices and squeezing out a lot of the weaker long positions. In what has to be one of the longest streaks in history, gold closed under it’s 200 day moving average for the first time in 732 days. September’s low price and Fib support are on and the same at $1,542.00 and should be watched if market start to roll over today. As for USDCAD trend support just under 1.0350 should be watched today and a break of that opens up another 75 pips lower. Sentiment is overtly skewed to the topside, so USDCAD bulls should be prepared for a squeeze in the coming days. For those on the sidelines anything with a 1.02 handle should be appealing for a move back to 1.04-1.05. 

Thought of the Day

“Money is like manure. You have to spread it around or it smells.”

J Paul Getty