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Good morning/afternoon everyone!
Its a risk on day in FX with all of the majors currencies up from yesterday’s levels. Investors continue to be unfazed by the US-China trade war and based on the strength of the Canadian dollar, they are hopeful that with Canadian foreign minister Freeland back in Washington today, progress can finally be made. The best performing currency is the Australian dollar but the Swiss Franc is not far behind. The Swiss National Bank meets tomorrow and investors are unwinding their long CHF positions on the fear that the central bank will harden their criticism of the currency strength. EUR/CHF hit a 13 month low this month and after riding the reversal for +50 pips in USDCHF for a swing trade, we think there will be further profit taking on long CHF positions during the NY session. Sterling is also up strongly this morning on the back of solid inflation data so +GBPCHF could work too but its high vol. Consumer and producer prices accelerated this month, reinforcing the Bank of England’s optimism. The Japanese Yen is trading lower this morning despite the Bank of Japan’s rosy economic outlook. The BoJ left interest rates unchanged last night and said the economy is expanding moderately despite escalating trade tensions. The main focus today will be on US-Canada trade talks and any other trade related headlines as the US only has housing starts and building permits scheduled for release.
The MAIN THEMES I see today are
+USD, +CAD, +GBP, +NZD, +AUD
-EUR, -CHF, -JPY
1. Sell EURCAD at 1.5138, Stop at 1.5166, Target 1.5110
2. Buy GBPUSD at 1.3183, Stop 1.3155, Target 1.3211
3. Buy USDJPY at 112.39, Stop at 112.11, Target 112.67
4. Buy USDCHF at .9675, Stop at .9647 Target .9695
Close ALL open day trades by 10:20AM NY / 15:20 GMT