Daily Trader Talk – Monday 26th June.
What Happened on Friday> Top 3?
>FX Very quiet except – Canadian Inflation data soft, USDCAD Jumps higher.
>Oil rebounds slightly, Gold grinding higher too.
>Brexit negotiations continue.
Outlook
+Risk themes look mixed.
+ECB Draghi to speak in late US Session trade, from ECB Forum in Portugal.
+BREXIT negotiations still keenly watched, along with Oil price.
Data & Event Risk Today?:
- (USD) Core Durable Orders Data – 10.30pm Sydney.
- (EUR) ECB Draghi Speech from ECB Forum – 3.30am Sydney.
USDX: 96.95
USD Index traded flirted with 97.50 for the start of last week, then drifted back to the 97 level to close off the week.
The Dollar Index has stalled at 97 but with Janet Yellen speaking again this Wednesday I expect that we will see larger trading ranges without a doubt.
USDJPY: 111.25
Dollar-Yen remained in a tight trading range to close off the week.
Price action flirted with 111.75 last week on the high side before pulling down and settling at the 111.20 price area.
BOJ governor Kuroda is set to speak from the ECB forum this week (on Wednesday evening) and may provide new clues on BOJ policy but more likely to see this pair driven by USD sentiment this week.
EURUSD: 1.1197
The Euro was Bid back up to the 1.12000 level to close off the week.
I feel that we may see 1.1200 form as a support base for potential moves higher as markets start to undermine confidence in the US Fed rate hike path.
Draghi may be the catalyst for that if he comments on Inflation expectations at all.
GBPUSD: 1.2740
Sterling traded higher through the 1.2700 handle late last week and holding those gains to kick off this new week.
Brexit negotiations are ongoing, and we still have the potential for a jolt to the Downside on the back of BOE governor Carney speaking again this week (on Wednesday evening) from the ECB Forum.
I think it is too early to Buy GBPUSD until a breakout above the 1.2800 level is seen.
Currently holding firmly to start the week at 1.2740 after drifting higher last week.
AUDUSD: 0.7570
The Aussie nudged higher last week despite a lot of potential downside risk from Metal prices and Housing market concerns highlighted in the Moody’s downgrade of our top 4 banks.
The 7630 level has held as resistance very firmly and I must note the resilience of the Aussie dollar is quite astounding in the face of the global risk environment.
The AUDUSD pair closed down for the week after flirting with highs of 0.7630 rallying alongside the Kiwi most of the week, in choppy trade and quiet Daily ranges.
NZDUSD: 0.7280
NZDUSD saw wild whipsaws on the RBNZ holding interest rates but has since settled at the 7250 level quietly trading in a narrow range.
The kiwi has held the post RBNZ gains but is struggling to stay above 7300.
This week may see the same theme with a USD driven sentiment to drive this pairs next directional continuation. I expect to see the 7200 to 7300 level to hold for now though.
USDCAD: 1.3260
USDCAD was the BIG mover again ion Friday, as we expected on the Inflation data print.
USDCAD had moved lower throughout the Asian session due to the slow Oil price rebound, then the Soft Inflation data hit the CAD and UDCAD spiked from 1.3225 to 1.3325.
I can see that inflation data derailing the BOC notion of a Rate Hike for Canada, so I feel more upside is quite possible for USDCAD noting that it drifted lower to close the week around 1.3260 possibly opening the door for Buyers to step in at a better price.
Canadian GDT is out this Friday but we have Janet Yellen speaking midweek to possibly drive the USD into bull territory beforehand.
VIX:10.02
Volatility Index traded down 4.39% on Friday to very low level of 10.02.
Essentially this Fear-Index is very low which may mean that a lot of traders are looking to this week flurry of central bank speakers from the ECB forum for clues to fire up trading ranges once again.
GOLD: $1,256.80
Gold is a very interesting Trade right now.
It grinded out more gains on Friday, Bid back up to 1257/ 1257.50 on Friday.
I feel a big move higher is coming and will be driven by undermining of the US Feds ability to follow through with recent Hawkish promises. Once we get through that $1,300 technically there is a lot of potential for Upside.
Oil (WTI) : $43.25
Oil price rebounded slowly & slightly back above the $43 level for now.
Midweek we see Oil Inventories data again and I still favour the downside.
Macro Themes in Play
+USD & Risk theme quite mixed in Quiet FX Trading Ranges
+USDCAD Spikes higher on Inflation data miss for the CAD..
+SP500 Off highs on Friday, back from $2,450 to $2,430.
