By: Bastian Rubben
The US stock markets traded yesterday on mixed territory as the large technology stocks pulled NASDAQ down. The index is now close to the support at 2650 and a strong break-down might accelerate the declines. However, Dow and S&P 500 looks stronger, mainly because of the financial sector, and good results of the major banks will help the indices rise again.
The mixed trend in the stock markets caused the USD to move in different directions against the major currencies. The USD investors were disappointed by the TIC Long-Term Purchases data, but encouraged by the improving retail sales, as today they will focus on the housing starts & housing permits data. The CAD investors will look forward to the BOC rate statement, in which the central bank is expected to keep the rate on the current level.
On the technical aspect, the pair seemed to have strong resistance at 1.005, as it cannot get through. The USD is now facing the resistance of the 200 SMA and if it succeeds in breaking it through, it will try to cross above 1.005 once again, on the way to 1.02. However, a strengthening session by the CAD might pull the pair USD/CAD down to 0.99.
The CAD was weakening against the Euro, after the European currency rose on a "short-squeeze" that occurred after the currency made a false-break at 1.30 against the USD. The current support of the pair EUR/CAD is at 1.30 and if the Euro rises above the recent pick at 1.318, it might jump above 1.33. On the other hand, if the Euro resumes sliding, it might fall to the support at 1.30 again.
