Chart analysis USDCAD

Equity Updates

Equities have taken a beating overnight after recently doing an amazing job of showing resilience lately in the face of some very ugly data, but it appears that last nights bailout package failure is serving as a reality check. Note the weekly initial jobless claims number out of the US yesterday, which, at 573k shows an alarming further acceleration in job losses from already elevated levels. Today we have US Retail Sales and the news will inevitably be bad there (expectations already looking for only slightly better than last month's near record drop). Seems like the complacency in the market has been shaken a bit here and we risk larger moves again in currency-land - beware the volatility and stay careful out there.

Charts: USDCAD

USDCAD: CAD could be at the epicenter of market activity today due to CAD's sensitivity to the US auto industry. Yesterday saw the technical capitulation below the very clear 1.2450 line of support, but now we've already back above that level again this morning. We'd still like to see the pair close today back above the 1.2550 level to call a full reversal here, but the way winds are blowing at the moment, we may be setting up for a test of 1.3000+ here soon if the mood across markets remains sour. Energy prices are another variable worth watching in this equation.