USD Trading Outlook (22-01-2014)

Currencies

• The euro (EUR) rose up to 1.3579 after dropping down to 1.3515 against the US dollar (USD) during yesterday’s session. The single currency remains under pressure awaiting for more news to come out and in the meantime swings between losses and gains.
• The US dollar (USD) skyrocketed yesterday touching its four year high at 1.1017 against the Canadian dollar (CAD). The loonie depreciated as the Bank of Canada (BOC) may adopt an easing bias in order to support its economy in the near term. The BOC rate statement due today at 15:00 GMT and the press conference will be held at 16:15 GMT.

Equities

• The EUR 30 (DAX) touched its new record high at 9801 yesterday before retracing back to 9719. Yesterday, the German ZWE economic Sentiment came out worse than expected and the index moved lower. The index is now trading around 9770 and it looks for more news in order to continue the bullish momentum.

Commodities

• WTI Crude oil (OIL) rebounded from its low at 93.64 all the way up to 95.58 US dollars per barrel. The crude oil rose on speculation that the US stockpiles shrank and demand increases as the US is the world’s biggest oil consumer.

Mover & Shaker with forex options

• The British Pound (GBP) climbed more than 90 pips against the US dollar (USD), touching its weekly high at 1.6489. The monetary policy committee meets today and the British unemployment rate is on the calendar with expectations at 7.3%. It looks that the labour market is improving helping the cable to appreciate.
• Options traders may consider constructing a Long Straddle on GBPUSD and due to the high volatility may benefit from any directional move.
• A Long Straddle can be constructed by purchasing an at-the-money Call and an-the-money PUT on GBPUSD.