• USD/CAD +0.2%
• USD/CHF +0.2%
• NZD/USD -0.3%

USD/CAD

Dodge Adds Moderation: Lending to strength in the underlying, Governor David Dodge and fellow policy makers increased the benchmark rate for the fourth time to yield 3.50 percent this morning.  However, taking the steam out of the upside for the major, policy makersâ�,��"� inclusion of the phrase â�,��"moderateâ�,� hinted at a near term end to the short tightening cycle.  Swapping the â�,��"some further reduction in monetary stimulusâ�,� for the aforementioned, policy makers remain preventive in their stance.  However, economic data has recently been contrary to previous expectations as overall inflation remains to the lower end of what central bankers had anticipated.  Additionally weighing on the major, Canadaâ�,��"�s highly anticipated elections came to an expected end.  Winning against the incumbent administration, Conservative Party Candidate Stephen Harper will deal with a minority government once again that is expected, historically, to last no more than 19 months, unable to full establish ground.

Technically Speaking: Bouncing off of the longer term bottom at 1.1466, CAD bears gained ground on the day, breaking past the 1.1550 resistance ceiling and setting a trap for bulls heading into the asian session.  Currently hovering at 1.1518 above the 50-hour moving average, upside potential exists given current momentum can surpass 1.1529 (20-hour moving average) and 1.1536 (10-hour moving average).  Completing the near term short stack looks to be 1.1574 (23.6% fib of the 1.1794-1.1465 decline) with a near term cap at the 1.1582/90 region (confluent of the hourly high and 38.2% fib level).

Rumorville: After todayâ�,��"�s spike and subsequent retrace, light bids are coming in at 1.1480/85 with parties committed further below at 1455 and the multi-year low on December 14th at 1.1425.  Comparatively light offers are building at 1.1550 with heavier commitments forming a cap at 1.1660, January 20th daily high.

USD/CHF

Traders Cast Aside Richmond Survey: On the heels of the lower than expected leading economic indicators report yesterday, dollar bulls re-entered the foray in light of manufacturing suggestions that were slower than expected.  Although the Richmond index is not as widely considered as a reflection of current activity, market participants could not ignore the decline in this morningâ�,��"�s report.  Nonetheless, bidders returned to push the U.S. single currency higher on technical levels as compared to pure fundamental reasoning but look to be running thin going into the Asian session.  Coupling upcoming lowered expectations for existing home sales and durable goods orders, bears may return to test the 1.2500 figure.

Technically Speaking: Rising off of the 1.2561 bottom established yesterday, dollar bulls continued their near term push breaking through 10 and 20-hour moving averages before failing to break a formidable ceiling at 1.2620/23.  Currently hovering at another moving average resistance at 1.2662 (50-hour moving average), limited upside potential exists for the greenback bull with near term capping at 1.2638 (23.6% fib level from the 1.2887-1.2561decline).  Should the ceiling fail to hold, the break would lead to an attempted assault at 1.2685 (38.2% fib level from the aforementioned decline), site of previous consolidation.  Comparative downside floors reside at the 1.2500 figure and 1.2420 (September 12th low).

Rumorville: With minor support established at the 1.2555 figure, heavy bidding looks to take place slightly lower at the 1.2520/25 region.  Comparatively, offers reside at 1.2640, near previous support that held on January 20th.  Further offers are seen above with stronger commitments capped at 1.2725/30 or the 200-day moving average resistance.

NZD/USD

Kiwi Bulls Break Weak Intraday Ceilings: Touching off of the 0.6755 previously tested support floor, Kiwi bulls resumed efforts and broke through resistance ceilings at 0.6778 (10-hour moving average) and 0.6797 (20-hour moving average) before finding current consolidation above the 23.6 percent fib level at 0.6809.  In light of Stochastic bolstering an overbought extreme, further upside looks probable before capping occurs just under 0.6844 (38.2% fib from the 0.7000-0.6765 decline).  Downside exists below the barrier at the aforementioned 23.6 fib as bears attempt a retest of the intraday bottom.

Rumorville: Offer clusters at 0.6857/59 are keeping the underlying price action lower on the day with heavier commitments at 0.6900 keeping buyers from rising above current ceilings.  Comparatively, however, bidders are protecting the majorâ�,��"�s downside with bids coming in at 0.6760/65 with formidable interest at 0.6950 for a move higher.

Richard Lee is a Currency Strategist at FXCM.