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Euro sellers have struggled to maintain downward momentum since the single currency found support below the 1.06 figure against the US Dollar two weeks ago. Still, overall positioning continues to favor continuation of the long term down trend. From here, a daily close below support in the 1.0518-28 area (November 24 low, 23.6% Fibonacci expansion) exposes the 1.0341-67 zone (December 15 low, 38.2% level). Alternatively, a turn above support-turned-resistance ...
The Bank of Canada seemed to provide fuel for USD/CAD bulls with the statement that core inflation measures “continue to point to material excess capacity in the economy.” The statement combined with USD strength to stretch the 2-year differentials to their widest in 3-months. Betting against a pair that is showing the steepest yield differential in a quarter is a bet against momentum, which can be painful when wrong. Sticking to the tenet ...
JPY strength continues into the close of February and in anticipation of President Trump’s speech that will be analyzed for details on the timing of stimulus that could revive the reflation trade. There is a strong positive correlation to yields of US Treasuries and USD/JPY and a clear message from President Trump that inflationary inducing policies are on their way would likely help boost USD/JPY. Lack of details could keep the market on its current course of giving back-post election gains, most ...
We’ve seen Canadian Dollar strength that is backed by much of the Commodity run and subsequent USD weakness since the Fed hiked in December. However, February has been a sideways affair. I’m awaiting a price breakdown and close below the support levels of 1.3083/76 to validate the view. However, we do see a lot of support at 1.3000 as the price continues to hold up above 1.3000 or find bids. Regarding resistance, the price has had a difficult ...
The Euro recoiled sharply higher after hitting the weakest level in two months against the British Pound but overall positioning still seems to favor the downside. Continued selling from here puts the spotlight on a major double bottom capping losses since early September 2016. Near-term support is in the 0.8334-70 area (double bottom, 50% Fib expansion), with a daily close below that exposing the 61.8% level at 0.8257. Alternatively, a ...
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