• Trading ranges were mostly restrained today

  • Looks like the air is getting very thin for USDCAD on the least back-up in oil prices

  • EUR-bears are not out of danger just yet


Key FX developments today

  • Trading ranges were mostly restrained today, though the JPY developed quite a head of steam at times on the weak risk appetite in the early European session, as USDJPY tested support and GBPJPY was down to new local lows and not far from a major technical support level (see chart below).

  • GBP was sharply weaker on the day - note GBPJPY comment above and EURGBP completely rejecting the modest bearish reversal attempt from late last week. See also EURGBP chart below.

  • USDCAD pushed to new highs above 1.3750 on the fresh lows in the oil price, but also reversed quite hard on the modest bounce, suggesting that the air may be getting very thin for USDCAD on the least back-up in oil prices.

  • AUD and NZD were strong despite the risk off tone for much of today, with NZDUSD now facing down the last local resistance levels just below 0.6800. It's tough to ponder what to do if we do break higher in NZDUSD ahead of the unknown of this Wednesday's FOMC meeting.


EURGBP

Today's squeeze back higher in EURGBP suggests that the EUR-bears are not out of danger just yet. The last arguable scrap of resistance in EURGBP is around the 0.7300 level, or 61.8% Fibo retracement of the recent sell-off wave. Above there (likely on risk-off) and the market quickly shifts the focus to the highs for 2015 towards 0.75000.

EURGBP


GBPJPY - weekly

The weak sterling was also felt in this pair, as the yen was the strongest currency on the day today on weak risk appetite. Note that we are soon bearing down on the weekly Ichimoku cloud level, which comes in just below 182 and for the next several weeks.

GBPJPY

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