USD Trading Outlook (23-01-2014)

Currencies

• The euro (EUR) range bound between 1.3515 and 1.3583 against the US dollar (USD) for couple of days. The single currency remains bearish ahead of the European Manufacturing and services PMI due today at 09:00 GMT.
• The US dollar (USD) advanced recording its weekly high at 104.83 against the Japanese yen (JPY). The US dollar remains strong as better than expected releases are coming out from US. On the calendar, the US existing home sales due at 15:00 GMT and anything better than forecasted may pave the way towards higher highs.

Equities

• The US 500 (SPI) touched its record high ones again at 1843 before retracing back to 1828. The index tries to rebound back to higher levels and is nowtrading around the level of 1833.

Commodities

• WTI Crude oil (OIL) continues the upside for a second day rising more than 3 US dollars and reached its monthly high at 96.87 US dollar per barrel. The crude oil inventories will be released today at 16:00 GMT and forecasts show an increase of stockpiles by 0.7 million barrels.

Mover & Shaker with forex options

• The US dollar (USD) climbed during yesterday’s session and reached its four and a half year high at 1.1155 against the Canadian dollar (CAD). The loonie depreciated as the Bank of Canada (BOC) kept its benchmark interest rate at 1.0%. More data are coming out from Canada today and may move the pair even higher.

• Options traders may consider constructing a Bull Call Spread on CADUSD and may capture the potential of a possible continuation of the rally.
• A Bull Call Spread can be constructed by purchasing an in-the-money Call and selling out an out-of-the-money CALL on CADUSD.