Russell Sandiford
Reiwa-Capital.com
The FX majors have been rather quiet to start this week, understandably with US/Canada/Japan bank holidays on Monday.
The exception is GBP, seeing more wild volatility as the UK/EU Brexit negotiation saga continues, with a faint hope of a deal remaining.
GBP/USD remains just above the 1.26 handle, whilst EUR/USD is amazingly quiet –glued to 1.1030.
Australia’s RBA minutes from the last‘rate-cut’ meeting didn’t offer any major surprises, but the mixed data picture rolling out of China was enough to keep a lid on the AUD – with AUD/USD also quiet at 6770.
USD/JPY is always my risk yardstick and it has traded in a 15-pip range today with no real change in the risk thematic to fire up the haven flow, meaning that 108.30 price level remains.
USD/CAD is probably one of the most interesting for intra-day traders to get their trading binoculars pointed at. USD/CAD remains around1.3225 but the bounce back after Friday’s large reset lower, seems to be fizzling out.
What can we expect from today’s risk calendar?
Let’s not overlook the Bank of England Carney speech at 9.30 am London time, which is likely to be overshadowed by the ongoing tug of war in last minute Brexit negotiations – with Boris Johnson’s planned Ireland border issue resolution unlikely to succeed through the UK parliament.
The main risk event which can sway the EURJPY & EURUSD positioning is the German ZEW Economic Sentiment, due out at 8 pm Sydney / 10 am London.
I prefer to remain on the short side of Euro against almost all FX counterparts.
FOMC members update the markets later in the US dealing session –I remain bullish on USD as the Fed voting FOMC member remain slip on the December US interest rate meeting despite a high possibility of US rate cut at the end of this month.
FX Signal to watch:
USD/JPY to move from 108.30 to the ‘Key Level’ at 108.80 seems best ahead of FOMC speakers.
BUY USD/JPY @ 108.30
Target: 108.80 (+50 Pips)
Stop: 107.50 (- 50 Pips)
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