Global Markets:

  • Japan was closed for a holiday; other Asian markets are mostly higher this morning
  • Shanghai Composite is up 0.80 % while the Hang Seng gained 0.20 %
  • ASX closed 0.70 % higher and South Korea’s KOSPI rose 0.60 %

 FX Flows/Orders:

  • Talk of large stops resting beneath $1320 in Gold; the precious metal bounced on the first test of the level, but amid current sentiment, the stops are likely to attract price soon
  • EUR/USD has bids at 1.3750, which provided solid intraday support to the pair yesterday; there is still a fair amount of stops beneath that level, but dealers note system funds have moved their sell orders to sub-1.3725
  • Profit-taking orders seen from 1.3730 up to 1.3750
  • To the topside, some selling interest at 1.3810 and larger from 1.3840 to 1.3850
  • In GBP/USD, Asian bids resting at 1.6480, but no significant intraday support until 1.6425/30
  • EUR/GBP selling and GBP/CHF demand helped to dampen GBP/USD selling yesterday
  • USD/CAD – offers lined up at 1.1260/65, light stops through 1.1285 and then larger offers ahead of the 1.13 barrier option; bids seen at 1.1220
  • Japanese markets were closed today, so USD/JPY was very quiet
  • Leveraged funds still keen to buy dips in the pair; bids resting at 102.20 and in better size at 101.80

Market Sentiment:

The US Dollar strengthened across the board yesterday as traders reacted to Wednesday‘s FOMC announcement.  US data releases later helped to underpin the Dollar strength, with Initial Jobless Claims and Existing Home Sales in line with forecasts, but the Phily Fed Manufacturing Index beating expectations. The overnight session was quiet with no important econ data released and Japanese markets closed.

Looking ahead, Canadian CPI and Retail Sales are the only Tier-1 data releases. CAD-negative sentiment is likely to persist and the close above 1.12 in USD/CAD on Wednesday suggests a move to 1.1350 resistance in the near-term. Buying dips in the pair remains the preferred strategy; key levels to the downside are now 1.1180 and 1.1150.

Upcoming Events:

  • 09:00 GMT – Euro Zone Current Account (18.4B)
  • 12:30 GMT – Canada CPI MoM (0.6 %) YoY (0.9 %)
  • 12:30 GMT – Canada Retail Sales MoM (0.9 %)
  • 15:45 GMT – FOMC Member Bullard speaks
  • 17:45 GMT – FOMC Member Fisher speaks
  • 20:30 GMT – FOMC Member Kocherlakota speaks
  • 22:30 GMT – FOMC Member Stein speaks