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USD/CAD. Wedging within 1.02-1.08 range

USD/CAD (1.0296) is down overnight, testing lower within the increasingly tight range it has plied since late-May.

Technicals:

* Trend: Daily lower; weekly lower.
* Overbought/Oversold (stochastics): Daily neutral; weekly neutral.
* Support/Resistance Levels: Resistance lies at 1.0584 (Jul16 high), 1.0677 (Jul5,6 high), 1.0680 (Jun high), 1.0853 (May25 high) and 1.1725 (Jul’09 high). Support lies at 1.0277 (Jul13 low), 1.02 (psychological), 1.0139 (Jun21 low), 1.0110 (May13 low), 0.9931 (Apr21 low), 0.9825 (May’08 low), 0.9712 (Feb’08 low), 0.9058 (Nov’07 low).

Positioning:

* The CFTC, non-commercial, net slipped to 18K, keeping the uptrending channel for this times series since early-2009 intact.
* The risk reversal (3m, 25delta) ticked lower overnight with the decline in spot. It remains roughly in the middle of its six-month range, providing little direction for the trend in spot.
* Implied Vol (3m) is down slightly, and it lies just below the middle of it’s range so far in 2010.

Cross-asset valuation: In terms of other assets correlating with USD/CAD, watch the SPX (negative), CRB (negative), crude oil (negative), and the 2yr spread (negative).