Monday’s main theme could best be summarised as reduced optimism for a trade deal between China and the US. Halfway through Tuesday and I’m still struggling to find a theme!
Ranges have been tight, EURUSD stuck between 1.1162 and 1.1182. GBP had a move lower during European hours falling back below 1.2950 to a low of 1.2927 but even that was short-lived as we headed back to 1.2950 by the European close.
AUD, NZD and CAD all strengthened a little as European shares rallied but US equities struggled to make any headway initially after weaker-than-expected results from Home Depot weighed on the DJ.
The US day was as quiet as Asia and Europe had been. GBPUSD took another dip hitting a low of 1.2910 as the first of the live TV debates between PM Boris Johnson and Labour Leader Jeremy Corbyn began.
USDJPY really struggled to move far from 108.50 and similarly EURUSD from 1.1080. The one currency that did move was CAD, which weakened on the back of some comments from Bank of Canada Senior Deputy Governor Wilkins.
While noting that rates are low, she emphasised there was still room to manoeuvre and other options would be available if needed.
USDCAD immediately spikes higher from 1.3230 to 1.3270. That aside, it’s a dull session with traders more interested in Trump impeachment hearings than anything else.
As the day ends, EURUSD is 1.1080, GBPUSD 1.2925 and USDJPY 108.55. XAU ends the day at $1,472.50 while the DJ closes down 102 points although the Nasdaq closes up 20.
As USDCAD did have a move yesterday, I thought it would be good to take a quick look at the ‘Loonie’.
As you can see from this hourly chart 1.3280 is a level we broke down from in mid-October and despite a couple of prior attempts a week or so, we have thus far failed to regain that level.
Despite the Central Bank comments, we have thus far fallen short once more. So watch this as a pivotal level going forward, with next strong resistance up towards 1.3350 thereafter.