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*Good morning/afternoon everyone!*
It will be a big day in the FX market with Fed Chair Jay Powell testifying before Congress at 10AM NY time. From his prepared remarks we know that he’s optimistic about the U.S. economy but worried about trade tensions. The U.S. dollar is holding strong against the Yen ahead of the release and flat against other major currencies with the exception of the New Zealand dollar, which is up 0.63%. NZD soared on the back of stronger inflation data, taking out stops in the process. UK labor data was in line with expectations but slightly weaker than the previous month. Global bond yields are lower this morning, oil is below $70 a barrel and stocks are flat. The recent decline in oil leads us to believe that the loonie is due for a correction. We don’t expect much in the way of moves ahead of Powell’s speech but there could be some relative value plays.
*The MAIN THEMES I see today are*
-AUD, -NZD, -CAD
Neutral GBP, USD, JPY
*Today’s Initial Trades*
Here’s the summary –
1. Buy USDCAD at 1.3145, Stop at 1.3117, Target 1.3173
2. Sell AUDCHF at .7362, Stop at .7390, Target .7334
3. Sell NZDJPY at 76.70, Stop at 76.98, Target 76.42
4. Buy EURUSD at 1.1721, Stop at 1.1693, Target 1.1749
Close ALL open day trades by 10:20AM NY / 15:20 GMT