Markets remain mixed in the first day of 2009. Dollar index edges mildly higher to 81.84 but lacks followthrough buying. US stocks are nearly flat despite rally in Asian and European Equities. Gold and Crude oil retreat mildly earlier today but pare some losses in early US session. US ISM manufacturing index dropped more than expected from 36.2 to 32.4 in Dec, worst reading since 1980. Price paid component dropped further to 18. Employment component also continued deterioration to 29.9.

Finalized reading of Eurozone's December manufacturing PMI dropped to record low at 33.9, worse than market expectation of 34.5 and 35.6 in November. In Germany, the reading came in at 32.7 (consensus: 33.5; November: 35.7). The poor figures signaled that Q4 GDP in the 15-nation region should have contraction by much more than 0.2% qoq and gave the ECB pressure to lower interest rate further from 2.75%. In the UK, December manufacturing PMI (finalized) improved slightly to 34.9 from 34.4 in November. However, it's still the 8th consecutive monthly decline. Concerning the property market, the Halifax housing price dropped 2.2% in December, worse than -1.6% as expected but better than -2.6% in previous month. On annual basis, the gauge dropped -16.2%, compared with -16.6% expected by economists and -14.9% in November.

USD/CAD Mid-Day Outlook

Daily Pivots: (S1) 1.2056; (P) 1.2212; (R1) 1.2321; More.

USD/CAD continues to stay in established range of 1.1985 and 1.2389 as triangle consolidation continues. Though, short term outlook remains unchanged. Further rally is still in favor. Also, fall from 1.3005 should have completed at 1.1818. Break of 1.2514 resistance will confirm this case and bring retest of 1.3005/15 resistance zone. On the downside, though, below 1.1985 will indicate that fall from 1.3005 is probably resuming towards 1.1464 support instead.

In the bigger picture, firstly, there is no confirmation of completion of medium term up trend from 0.9056 yet. Though, recent development suggests that consolidation from 1.3015 is still in progress with risk of another fall to retest 1.1464 support before resuming the medium term up trend towards 61.8% retracement of 1.6196 to 0.9056 at 1.3469. However, decisive break of 1.1464 support will be an important alert that whole rise from 0.9056 has possibly completed. Deeper correction should then be seen in such case. ONLOAD=resizeImg(this,486) class=hand >