Today’s Trades 06.19.2018 USDCAD, EURJPY, AUDJPY

Swing

*Good morning/afternoon everyone!*

President Trump’s threat to impose another 200B in tariffs on China sent ripples throughout the financial markets. Investors are selling equities, currencies and buying Treasuries. Yields are down across the board and Dow futures, which are down 300 points are pointing to a very ugly NY open. The U.S. dollar is up against all of the major currencies except for USD/JPY and this price action is consistent with risk aversion. While China doesn’t want a trade war, they said they aren’t afraid of one, so headline risk is a serious one over the next few trading days. Expect the language to harden and currencies to soften. GBP/USD is trading at a one year low this morning as pound’s troubles are doubled by Brexit complications -- the government refuses to accept
the Parliament’s proposal on the meaningful vote. EUR/USD is trading below 1.15 as ECB Liikanen’s view that rates can remain unchanged after the 2019 if needed compound the currency’s losses. USD/CAD is trading at a fresh 1 year high on the back of falling oil prices but the worst performing currency this morning is the Australian dollar, which is down across the board following the RBA minutes which showed concern about the rise in the Australian dollar and its impact on growth and inflation. In other words, risk aversion is being compounded by bad news. Looking ahead, we expect all of the major currencies to remain under pressure with further losses likely.

*The MAIN THEMES I see today are*

-USDJPY
-EUR
-GBP
-AUD
-CAD

*Trading Biases*

-EUR, -GBP, -AUD, -CAD
+USD (but -USDJPY)
+JPY
neutral CHF, NZD

*Today’s Initial Trades*

Here’s the summary --

1. Buy USDCAD at 1.3270, Stop at 1.3242, Target 1.3298
2. Sell AUDJPY at 80.99, Stop at 81.27, Target 80.71
3. Sell EURJPY at 126.91, Stop at 127.19, Target 126.63

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 06.15.2018 EURGBP, CHFJPY, EURJPY, USDCAD

Swing

*Good morning/afternoon everyone!*

At first glance, it appears that the U.S. dollar is under pressure against all of the major currencies as investors wait for Trump’s list of tariffs on China. However on an intraday basis, USD/JPY is holding onto its gains into the NY open and trying to edge slightly higher. With that in mind, a trade war is bad for everyone and negative for risk appetite so its difficult to imagine that we’ll see significant rallies in currencies today. Canada has the largest decline in 10 year yields which explains why CAD is also the weakest currency but after having breached 1.3150, the pair is due for a correction. EUR is struggling to recapture 1.16 and took hit from reports that Angela Merkel’s government is at the brink as its coalition partner plans to end their alliance. While the currency recovered its initial losses this development should limit the recovery in EUR/USD. The Australian and New Zealand dollars are under pressure with NZD leading the slide after weaker manufacturing PMI numbers. The Yen seems to be unfazed by the Bank of Japan’s lowered CPI assessment. The U.S.’ Empire State manufacturing survey and University of Michigan Consumer Sentiment report are scheduled for release today but the main focus will be on China tariffs. One of my strongest views today is GBP outperformance.

*The MAIN THEMES I see today are*

-EUR
-CHF
+CAD
+GBP

*Trading Biases*

+GBP, +USD, +CAD
-EUR, -CHF, -AUD, -NZD
mildly +JPY

*Today’s Initial Trades*

Here’s the summary --

1. Sell EURGBP at .8730, Stop at .8758, Target .8702
2. Sell CHFJPY at 110.83, Stop at 111.11, target 110.55
3. Sell EURUSD at 1.1589, Stop at 1.1617, Target 1.1561
4. Sell USDCAD at 1.3140, Stop at 1.3168, Target 1.3112

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 06.11.2018 USDJPY, USDCAD, USDCHF

Swing

*Good morning/afternoon everyone!*

The most notable move in the FX markets this morning is in USD/JPY which is testing 110 after having traded as low as 109.25 at the start of the Asia session. There are no U.S. economic reports released today but the dollar is propped by the prospect of a Fed rate hike this week and higher yields. The weakest currency is the Canadian dollar which was hit hard by Trump’s attitude at G7, attack on Trudeau and Canada. Investors are still reeling from Friday’s softer Canadian employment report. The British pound is also under pressure following a series of softer economic reports -- the trade deficit widened and industrial production declined. AUD and NZD are flat but the slide in European currencies and the bid for the USD suggests that these currencies will turn lower during the NY session. The European Central Bank also has a policy meeting this week and while the positive momentum in EUR is fading this morning, we think buyers will swoop ahead of the rate decision.

*The MAIN THEMES I see today are*

+USD
-GBP
-CAD
-JPY
-CHF

*Trading Biases*

+USD
-GBP, -CAD, -JPY, -CHF
mildly -AUD and -NZD
neutral EUR

*Today’s Initial Trades*

Here’s the summary --

1. Buy USDCAD at 1.2990, Stop at 1.2962, Target 1.3018
2. Buy USDJPY at 110.01, Stop at 109.73, Target 110.29
3. Buy USDCHF at .9868, Stop at .9840, Target .9896
4. Sell GBPUSD at 1.3353, Stop at 1.3381, Target 1.3325

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 06.05.2018 – USDCAD, EURJPY, EURAUD

Swing

*Good morning/afternoon everyone!*

At the start of the North American trading session, there has yet to be any little consistency in the U.S. dollar’s performance but as the session progresses, we should start to see some moves especially with US yields falling. The USD should slip against JPY and GBP, which is benefitting from very strong data. Sterling is the best performing currency this morning thanks to a hotter PMI services report that has lifted the pair across the board. It should only be a matter of time before 1.3400 is broken. The other currencies are struggling with AUD and CAD leading the slide. AUD declined after the RBA rate decision because policymakers emphasized the need for unchanged policy to spur growth and inflation. They also expressed concerns about low inflation and US-China trade tensions. CAD is being hit by the same trade concerns. EUR is hampered by softer data -- PMI services was revised lower and retail sales came in much weaker than expected. The U.S. non-manufacturing ISM report is the main focus today in the NY session and given the strength of NFPs, the risk is to the upside for the release.

*The MAIN THEMES I see today are*

-USD
-AUD
-CAD
+GBP
+CHF

*Trading Biases*

+GBP, +CHF, +JPY
-USD, -AUD, -CAD
mildly -EUR and -NZD

*Today’s Initial Trades*

Here’s the summary --

1. Bought USDCAD at 1.2975, Stop at 1.2947, Target 1.3000
2. Sell EURJPY at 128.24, Stop at 128.52, Target 127.96
3. Buy EURAUD at 1.5337, Stop at 1.5309, Target 1.5365

Close ALL open day trades by 10:20AM NY / 15:20 GMT

USD/CAD Headed Below 1.28

USD/CAD Headed Below 1.28

Chart Of The Day

USD/CAD Headed Below 1.28

The Canadian dollar soared today on the back of the Bank of Canada’s monetary policy announcement. Although interest rates were left unchanged, the BoC made a u-turn in their statement by dropping the reference to being “cautious on rates” and removing the language that pertains to the need for “monetary policy accommodation.” With inflation “likely to be a bit higher in the near term,” and activity “a little stronger than projected,” the BoC expects “solid wage growth” to contribute “positively to housing and consumer demand.” We believe that the Canadian dollar will continue to benefit from this shift in sentiment, leading to further profit taking in USD/CAD.

On a technical basis, USD/CAD has fallen below the first standard deviation Bollinger Band. Although there’s some support at the 20-day SMA near 1.2850, we believe that USD/CAD will fall to at least 1.2790, the 38.2% Fibonacci retracement of the 2018 rally and the first standard deviation Bollinger Band and most likely to the May low near 1.2725.

USDCAD – On the way to 1.2600?

USDCAD – On the way to 1.2600?

Chart Of The Day

One of the strongest currencies over the past few days has been the loonie. It’s up more than 230 pips against the buck since the start of the week after having failed to take out the upside at 1.3000 level. Higher oil prices. strong funda data and creeping doubt that the Fed will not hike rates more than 2 more times this year have all helped the currency to rally over the past 48 hours.

If the labor data tomorrow surprises to the upside, the markets will begin to price the prospect of BOC rate hikes before the end of summer. Right now the BOC is the only G-7 central bank to seriously consider additional tightening and with the Canadian economy doing better than expected chances are good that BOC may resume its normalization policy soon.

With 1.3000 firmly rejected, the path of least resistance in the loonie is towards 1.2600 and a strong labor number tomorrow could send the pair in that direction before the week is over.

Today’s Trades 04.25.2018 – EURUSD, USDCAD, EURGBP

Swing

*Good morning/afternoon everyone!*

The U.S. dollar higher across the board this morning as ten year Treasury yields trade above 3%. With no U.S. economic reports on the calendar, the dollar will take its cue from yields which are likely to volatile during the NY trading session as investors decide whether U.S. rates should stay above or below this key level. All of the major currencies are hit by the dollar strength but an ECB meeting on the calendar tomorrow leaved the euro is particularly vulnerable. With that in mind, the worst performing currencies this morning and the comm dollars which extended their losses on the back of falling commodity prices. Sterling and the Japanese Yen are the most resilient and that’s likely to remain the case as USD/JPY looks at a slow climb upwards. Stock futures are signaling a lower open that could add pressure on high beta currencies.

*The MAIN THEMES I see today are*

+USD
+JPY (but not vs USD)
-EUR
-CAD
-CHF

*Trading Biases*

+USD
-EUR, -CAD, -CHF,
mildly +GBP, +AUD, +JPY on relative basis
neutral NZD

*Today’s Initial Trades*

Here’s the summary --

1. Buy USDCAD at 1.2864, Stop at 1.2836, Target 1.2892
2. Sell EURUSD at 1.2202, Stop at 1.2230, Target 1.2174
3. Sell EURGBP at .8740, Stop at .8768, Target .8712

Close ALL open day trades by 10:20AM NY / 15:20 GMT

Today’s Trades 04.23.2018 – USDCHF, AUDJPY, CADJPY, USDCAD

Swing

*Good morning/afternoon everyone!*

The U.S. dollar is starting the new week with a fresh round of gains as the greenback is trading against all of the major currencies. The main catalyst is the 10 year Treasury yield which is hovering just under 3%. There are no major U.S. economic reports scheduled for release today but last week’s momentum is carrying over to this morning’s trade. The Japanese Yen is the weakest currency followed by the euro which shrugged off upward revisions to EZ PMIs. The commodity currencies are also up across the board although the loonie is the most resilient as oil prices stabilize. Its Monday, so its difficult to say whether there will be continuation after these strong moves but minimally USD/JPY looks like its headed towards 108.50. GBP/USD could test 1.39 but UK yields are up quite a bit this morning as well.

*The MAIN THEMES I see today are*

+USD
+CHF
-GBP
-JPY
-AUD
-NZD

*Trading Biases*

+USD, +CHF
-GBP, -AUD, -NZD, -JPY
mildly -EUR, +CAD

*Today’s Initial Trades*

Here’s the summary --

1. Buy AUDJPY at 82.70, Stop at 82.42, Target 82.98
2. Buy CADJPY at 84.60, Stop at 84.32, Target 84.88
3. Sell USDCHF at .9755, Stop at .9783, Target .9727
4. Sell USDCAD at 1.2780, Stop at 1.2808, target 1.2752

Close ALL open day trades by 10:20AM NY / 15:20 GMT

USDCAD – Back to 1.2500?

USDCAD – Back to 1.2500?

Chart Of The Day

Yesterday’s dovish BOC statement send USDCAD back above the 1.2600 figure -- a move that no doubt pleased the Canadian monetary officials who want to see the value of the currency remain relatively low. But the rally could be short-lived if the data continues to surprise to the upside.

Tommorrow the market will get a look at CPI and Retail Sales Reports and although both datasets are projected to be a bit lower than the month prior and upwards surprise could send USDCAD back to a retest of the 1.2500 level. Despite Governor Poloz’s caution, the central bank has not ruled out the prospect of another rate hike in May, and some analysts continue to believe that the BOC will act.

Furthermore, with oil prices within a dollar of the key $70/bbl mark, the Canadian economy could absorb a rate hike with relative ease so the loonie could still have some juice left in the trade if the data provides the catalyst.

USD/CAD to 1.27?

USD/CAD to 1.27?

Chart Of The Day

USD/CAD rose above 1.26 following the Bank of Canada’s monetary policy announcement. The pair probably would have extended its rally to 1.27 if not for the price of oil, which climbed to a fresh 3.5 year high after crude stocks took an unexpected tumble. Despite all of the improvements in Canada’s economy, Bank of Canada Governor Poloz and Deputy Governor Wilkins did not feel that underlying issues are evolving well enough to send an unambiguously positive signal to the market. The tone of their press conference was cautious with Poloz saying the economy is not yet able to stay at full capacity on its own and therefore interest rates may need to remain below the neutral range. They also see companies hesitant to invest because of NAFTA risks. As a result, the BoC feels they need to be data dependent and the pace of rate hikes is a considerable question mark as headwinds prevent a full recovery. Trade protectionism remains the biggest risk for Canada and they expressed no excitement about the recent progress in NAFTA talks.

Given how much USD/CAD has fallen ahead of the rate decision, we believe their lack of optimism will lead to additional short covering that should take USD/CAD to at least 1.2680 if not all the way to 1.2750. Technically, the next key resistance for USD/CAD is between 1.2685-1.2700, where the February 9th swing high meets the 50% Fibonacci retracement of the January to March rally and the next big figure.

Where to Sell USD/CAD?

Where to Sell USD/CAD?

Chart Of The Day

Where to Sell USD/CAD?

After selling off aggressively in the front of the week, USD/CAD rebounded as it became clear that no deal will be made at the NAFTA summit in Peru. According to President Trump, a deal is close and the U.S. concession on regional auto content puts them one step closer to an agreement. Mexico thinks a deal will be made in May but a preliminary agreement could happen sooner. This means USD/CAD is still a sell on rallies especially between 1.2650 and 1.2700. The Canadian dollar will be in play next week with a Bank of Canada meeting on the calendar. No changes are expected but there could be a tinge of optimism. The last time they met, the monetary policy statement contained a more cautious tone with the BoC expressing concerns about lower wage and household credit growth. Since then, oil prices hit a 3 year high, retail sales rebounded and job growth accelerated. With a NAFTA imminent, the BoC has less to worry about which could foster optimism from the central bank.

Technically, although the 200-day SMA sits right above current levels (near 1.2625), we think that profit taking could drive USD/CAD up to the 100-day SMA near 1.2675. That would be the ideal level to sell as it also coincides with the 50% Fib retracement of the Jan to March rally. Meanwhile 1.2800 should hold as resistance and we view any move toward level as an opportunity to add to short positions. Should USD/CAD break 1.25, the next stop will be February’s spike low of 1.2450.

Today’s Trades 04.12.2018 – GBPUSD, USDJPY, USDCAD

Swing

*Good morning/afternoon everyone!*

The currency markets are eyeing geopolitical risks this morning as President Trump says an attack on Syria could happen very soon, or “not at all.” While this creates more confusion than clarity, investors are relieved that an announcement wasn’t made overnight. By hitting Syria, the President is taunting Russia and the greatest implication aside from military engagement, U.S. dollar weakness and risk aversion is higher oil prices. USD/CAD remains under pressure was investors eye the headlines for updates on Trump’s decision. Softer Eurozone industrial production makes the euro the weakest performing currency this morning. Sterling came back strongly after dropping below 1.4150. USD/JPY has moved to the top of its recent range on the back of higher bond yields and Dow futures, which are pointing to a positive open. AUD is flat while NZD continues to outperform. There are no major U.S. economic reports scheduled for release today so keep on the headlines and stocks.

*The MAIN THEMES I see today are*

+GBP
+CAD
+NZD
-EUR
-USD (but +USDJPY)

*Trading Biases*

+GBP, +CAD, +NZD
-EUR, -USD (except USDJPY), -AUD, -CHF, -JPY

*Today’s Initial Trades*

Here’s the summary --

1. Sell USDCAD at 1.2594, stop at 1.2623, Target 1.2563
2. Buy USDJPY at 107.13, Stop at 106.85, Target 107.41
3. Buy GBPUSD at 1.4185, stop at 1.4157, Target 1.4213

Close ALL open day trades by 10:20AM NY / 15:20 GMT