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*Good morning/afternoon everyone!*
With many US traders off this entire week for the Thanksgiving holidays, we didn’t expect much from currency trade. But with the political impasse in Germany, the week kicked off with wild swings in the euro. The single currency collapsed Sunday night on news that the coalition talks failed but it turned higher during the European session on the hope that the FDP could form a minority government. Some attribute the recovery to localization of risks but Germany is the largest country in the Eurozone so their pains will be felt throughout the region. Forming a new government won’t be quick and its not clear where Merkel goes from here, which is why there’s a greater risk of correction than recovery extension in euro. The U.S. dollar is quietly bid as yields stabilize – there are no major U.S. economic reports this week outside the FOMC minutes, which should be hawkish so a recovery could be in store for the greenback especially with USD/JPY finding support at 112. Sterling is strong, the loonie is weak as NAFTA talks continue with very little progress. Negotiations resume this morning. AUD and NZD are trying to stabilize after strong moves lower.
*The MAIN THEMES I see today are*
-EUR, -CAD, -JPY, -CHF
+USD, +GBP, +NZD, +AUD,
*Today’s Initial Trades*
1. Sell EURUSD at 1.1784, Stop at 1.1812, Target 1.1756
2.Sell EURJPY at 132.12, Stop at 132.40, Target 131.84
3. Buy USDCAD at 1.2780, Stop at 1.2752, Target 1.2808
Close ALL open day trades by 10:20AM NY / 15:20 GMT