Canadian dollar underperforms as oil prices dip
Commodity currencies hurt as trade truce optimism drops, while safe haven currencies and the greenback relatively outperform.
EUR/USD: Range-bound movement befitting its consolidatory overview
Low-impacting data yesterday and a bank holiday in the US kept the pair's movement relatively sedate, with a slight unwinding of positions early on. Today's economic sentiment figures out of ZEW for Germany and the Eurozone will be released, with expectations for ongoing negative figures for both and on the back of yesterday's industrial production figure for the bloc that showed 0.4% growth. Out of the US, there will be speeches from a couple of US Federal Open Market Committee (FOMC) members, preceded by New York Manufacturing Index's release. Long-term negative technical bias persists, but on the daily more of its technical indicators are turning neutral. As for bias, retail sentiment has shifted to the middle from a previous slight majority short 52%.
GBP/USD: Underperforming, but mostly recovering by the session’s end
Two days of successive significant gains at the end of last week was met with slight retracement yesterday, as the background focus remains whether or not a UK-EU Brexit deal can be agreed upon prior to the month's end deadline. In the meantime, there will be plenty of fundamental items on the economic calendar, including employment data today where the unemployment rate is expected to remain at 4%. That will be followed by Consumer Price Index (CPI) figures tomorrow, and retail data the day after. Volatility strategies remain best up until Brexit is official, but that doesn't mean they won't get tested in the short-term should movement remain range-bound.
USD/JPY: Safe haven holds its ground as trade optimism drops
Safe haven assets enjoyed early relief yesterday morning as trade optimism dropped following news that China required more talks before the phase 1 deal could be signed, only to give back those gains by the end of the session to finish slightly higher against the greenback. Its price is back at its short-term resistance level, and on the weekly the outlook is volatile while on the daily it’s a shift to an initializing bull trend. Keep in mind the catalyst was fundamental for the recent moves higher, and hence any undoing of risk appetite could easily cause a technical overview shift, especially if equities get hit should earnings be worse than expected.
USD/CAD: Energy price plummet ensure the Canadian dollar underperformed for the session
Bank holidays for both the US and Canada yesterday, but that doesn't mean the pair didn't experience a bit of volatility, as a drop in energy prices gave the pair's price a leg to stand on. The calendar is clear for Canadian data until tomorrow's Consumer Price Index (CPI) figures and manufacturing the day after. Its price remains close to its main technical indicators and could easily cause an overview shift and produce false signals, with a negative Directional Movement Index (DMI) cross occurring yesterday and its price failing to cross back above its 100-day moving average. As for majority short bias, its risen 6% to 58%.
AUD/USD: Dented trade outlook takes its price back below its 50-day moving average
A negative trade outlook has translated into negative news for this proxy currency, especially with commodity currencies falling back from the highs and the trade mood turning sour (once again). On the weekly, negative technical bias still permeates, and on the daily that also remains the case though with its Average Directional Index (ADX) showing an ongoing propensity to trend. Price has crossed back below 50-day moving average, and now beneath all its main long-term daily moving averages. In central bank news, the Reserve Bank of Australia’s (RBA) minutes release confirmed the board’s readiness to for further rate cuts (into record territory) to support growth and jobs.
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