News & Data:
CFTC Positioning Data:
Another risk-off session in Asia, with China the cause this time. Chinese regulators announced that they would stop the three largest equity brokers from opening new margin accounts for clients, for at least 3 months. This led to a big decline in the stocks of the brokerage firms, which then pulled the Shanghai Composite Index lower as well. The index is currently down 7 %. Gold had a quiet session, consolidating between $1275 and $1281. Similar price action in Silver, with traded $17.60-$17.75 for most of the session.
In FX, the Swiss Franc was the worst performer as EUR/CHF rose back above parity and USD/CHF rallied to a high of 0.8680. In the near-term, it is best to avoid trading the CHF pairs as liquidity will remain poor and we could see random 200-300 pip moves any time. Further, while the peg has been abadoned, the SNB has said that they still will intervene if necessary.
EUR/USD spent the session in a 1.1550-1.1575 range and flows were light. Everyone is waiting for the ECB meeting on Thursday, but we could see some light short squeeze ahead of the event amid crowded positioning. The key levels to watch are 1.1460 and 1.1350 to the downside and 1.1650 & 1.1730 to the topside. GBP/USD has been weak in the last few sessions, but we are likely to see further consolidation 1.50-1.52 ahead of the Bank of England Minutes & employment data on Wednesday.
Key Data This Week: