USD/CAD Fundamental Analysis July 27, 2012, Forecast

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Analysis and Recommendations:

The USD/CAD fell slightly to trade at 1.0079 as the USD weakened. CAD is up 0.6% to yesterday’s close.  Considering the macro environment, USDCAD has traded in a relatively tight 647 point (0.9800 to 1.0447) range in 2012. Risk reversals are trending lower and have shifted faster than USDCAD, suggesting that spot has yet to react to the option’s market declining interest in protecting against USD upside. Meanwhile, interest rate spreads are also trending lower and acting as somewhat of a weight against USDCAD. Finally, USDCAD has been tied relatively tightly to oil prices. While risk aversion jumped higher last Friday, it has failed to move up to the May/June highs and today’s comment by ECB President Draghi have increased risk appetite; opening the door to USDCAD downside

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports.

Economic Data July 26, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Jul. 26

 

KRW

 

 

 

South Korean GDP (QoQ) 

0.4%

 

0.5% 

 

0.9% 

 

 

 

 

JPY

 

 

 

BoJ Governor Shirakawa Speaks 

 

 

 

 

 

 

 

 

 

EUR

 

 

 

GfK German Consumer Climate 

5.9

 

5.8 

 

5.8 

 

 

 

 

USD

 

 

 

Core Durable Goods Orders (MoM) 

-1.1%

 

0.1% 

 

0.8% 

   

 

 

USD

 

 

 

Durable Goods Orders (MoM) 

1.6%

 

0.4% 

 

1.6% 

   

 

 

USD

 

 

 

Initial Jobless Claims 

353K

 

380K 

 

388K 

   

 

 

USD

 

 

 

Continuing Jobless Claims 

3287K

 

3310K 

 

3317K 

   

 

Upcoming Economic Events that affect the CAD and USD

Date

Time

Currency

 Event

Previous

Jul 27

12:30

USD

Advance GDP q/q

1.9%

13:55

USD

Revised UoM Consumer Sentiment

72.0

 

Government Bond Auctions

Date  Time  Country 

Jul 27  09:10  Italy

Jul 27  17:00  US

 

 

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About: FX Empire Analyst - Barry Norman

Barry produces a private Daily Market Review newsletter that is distributed around the globe to over 25,000 subscribers and recently published a book on Options Trading that is available from amazon.com

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