Dollar inches up in early US session after much stronger than expected US durable goods orders. However, the gains are quickly limited after sharp fall in
S&P/Case-Shiller house price index. Durable goods orders rose strongly by 5.2% in Dec, much better than expectation of 1.9%. Strength was fairly broad-based. Ex-transport orders also rose 2.6%, beating expectation of 0.0%. However, the
S&P/Case-Shiller home price indexes showed further weakness in the housing market. The 20-city index dropped -7.7% yoy in Nov, even worse than expectation of -7.1%, to 188.8, the worse reading since records began in 01. Conference board consumer confidence deteriorated from upwardly revised 90.6 to 87.9 in Jan, but was above expectation of 86.0.
On the other hand, the major mover today is indeed the Canadian dollar again, which ride on record gold price and rally in oil prices. USD/CAD dives through parity as reaches as low as 0.9943 so far. Canadian dollar's strength is also apparent in EUR/CAD and CAD/JPY. Also, yen and Swissy were generally weak
Earlier today, Sterling was lifted briefly by CBI distributive trade which dropped from +8 to +4 but was much better than expectation of +0. The index suggests that while consumer spending slowed, there is still not disastrous drop yet.
USD/CAD Mid-Day Outlook
Daily Pivots: (S1) 0.9998; (P) 1.0058; (R1) 1.0093; More.
USD/CAD's fall from 1.0378 resumes in early US session by taking out 1.0015 low and 0.9971 support successively. At this point, intraday bias remains on the downside as long as 1.0021 minor resistance holds. Further decline should be seen towards 0.9756 cluster support (100% projection of 1.0378 to 1.0015 from 1.0118 at 0.9755). Above 1.0021 will turn intraday outlook consolidative first. But recovery should be limited by 1.0018 resistance and bring another fall.
In the bigger picture, a medium term bottom is in place at 0.9056 after USD/CAD just missed double projection target of 161.8% projection of 1.4006 to 1.1716 from 1.2737 at 0.9032 and 161.8% projection of 1.2737 to 1.0930 from 1.1874 at 0.8950. But with key medium term resistance zone of 1.0930, 38.2% retracement of 1.4006 to 0.9056 at 1.0947 and 50% retracement of 1.2737 to 0.9056 at 1.0897 remains intact, the long term down trend from 1.6196 is still in force.
Sustained trading below the short term rising trend line suggests that corrective rebound from 0.9058 has already completed with three waves up to 1.0378, after meeting 1.0339 resistance. Break of 0.9756 will confirms this case and encourage deeper decline to retest 0.9058 low. Meanwhile, above 1.0118 will turn short term outlook neutral first.