Quiet Markets Await Canadian GDP
Trading during the London session has been calm as prices continue to hover around levels seen at Fridays close. Traders in the UK are enjoying a long weekend in observance of the Spring holiday and US banks will be closed today in observance of Memorial Day. Liquidity will therefore be poor and prices are likely to remain within narrow ranges with unexpected and erratic bouts of volatility. The only economic releases today are GDP and current account balance data from Canada.
Under the weight of weak US data, USD started to slide against most currencies last week. It seemed as if the market became tired of Greek problems and needed something new to focus on. However, headlines describing dire situation in Greece continue to appear frequently and
the risk of yet another sentiment reversal is high. Latest news from Greece describe the possibility of an outside intervention in the economy, including tax collection and privatization of state assets in exchange for new bail-out loans.
March Canada GDP expected to improve to 0.2% from that surprisingly poor reading in Feb 0.2% and current account deficit is expected to narrow from previous 11B to 2.9B. Both news come out at 8:30 am EDT.
During the past week, USDCAD was stuck in narrow 9750-9810 range. Even
when the greenback was being sold against all other majors, it held up against the CAD. Break and close below 9750 would open a way to area around 9670 which is not only a support given by previous highs but also by 38.2% fib. ret. of the rise from 9443 to 9813. Should price break above the recent range, key target would be resistance at 9975.
Technical picture would suggest higher probability of a break lower as
Stochastic (9,3,3) and Williams %R (14) are both in an overbought
territory with MACD converging and about to give a bearish crossover
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