Loonieviews 29Sep16


Loonie rallies with oil deal

USDCAD Open (6:30 am) 1.3098-03 Overnight Range 1.3050-1.3113 29 Sept 16

FX-At-A-Glance

NOTE: This chart represents gain (or loss) of G10 currencies vs the US dollar from NY close (4:00 pm) to Sept. 29, 6:30 am EDT

The news that Opec had agreed to a production cut deal which was announced yesterday afternoon set the tone for FX markets overnight. It wasn’t a full-blown “risk-on” environment but riskier assets were in demand. USDJPY was the big mover overnight, rallying from 100.65 to 101.74 with the Nikkei gaining 1.39%. It is half year end in Japan (Sep. 30) which may have had an impact. AUDUSD and NZDUSD climbed in Asia but retreated in Europe. Both currency pairs are below their overnight opening levels with Kiwi impacted by the doveish central bank outlook.

The dollar selling enthusiasm evident in Asia went missing in Europe. EURUSD GBPUSD and USDJPY all declined. Eurozone Economic Sentiment data improved but had little impact on FX trading due to the overhang from Brexit.

USDCAD rebounded from yesterday’s 1.3048 low, rising steadily during the Asia session due to a mix of profit-taking and general negative sentiment surrounding the Canadian economy. In addition, the details of the Opec production cap agreement are sketchy and the reality is that the so call agreement is merely a promise to study and evaluate the idea prior to the Opec general meeting on November 30. USDCAD movements will be driven by WTI price swings.

US data releases include Q2 GDP, Jobless claims, pending home sales and PCE. There is another speech from Janet Yellen which will most likely echo yesterday’s remarks. Yesterday she said that “there was no fixed timetable” on a rate increase.

USDCAD technical outlook.

The intraday usdcad technicals are bearish while trading below 1.3110 and supported by the break below 1.3150 which suggests another test of support at 1.3040 and then the 1.2990-1.3010 pivot area. A break below 1.2990 suggests further losses to 1.2850. A move above 1.3120 should extend gains to 1.3150. For today, USDCAD support is at 1.3040 and 1.3000. Resistance is at 1.3120 and 1.3160.

Today’s Range 1.3020-1.3120

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Author: Loonieviews

In the past 30+ years, I have been an FX interbank market making trader, a high performing FX and Derivatives Sales person, creator of simple and complex risk mitigation strategies and a manager of high performance FX teams. The Trade of the Day is a culmination of that experience. Retail FX traders have access to a well-crafted and carefully researched FX trade strategy designed to generate FX profits while mitigating losses.

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