Daily Trade Recommendation

Originally updated: 08:00am London Time

Trading Bias: Neutral

Currency pair: GBP, CAD (pending on data)

Current Sentiment: Neutral

With the FOMC statement in 2 days, it's advisable to stay on the sidelines in US pairs unless something newsworthy is released.

In today's trading session I will be awaiting for UK GDP, comments from Poloz and US data to provide opportunities to get into the market. There is also mild bullish sentiment of AUD combined with USD weakness, however this is not driven by any major news, and the conviction is not high enough to enter a trade, unless there is a substantial pullback in the AUDUSD.

Fundamentals:

The overnight session saw US Services PMI and Dallas Fed Manufacturing Activity both come in lower than expected. This caused the market to sell more US dollars. All major currencies rallied against the US dollar, with GBPUSD up 155 pips from lows to highs. Be cautious if trading the USD as it may remain under pressure heading into FOMC statement on Wednesday.

In Asian-Pac session, no newsworthy events occurred and price action was relatively subdued with AUD, NZD and JPY all remaining range bound against all counterparts. RBA Governor Stevens spoke overnight but failed to jawbone the AUD as the RBA officials often do. He declined to speak about monetary policy but did however state the unemployment rate looks healthy. Aussie is testing yesterday's highs as the greenback stays on the back foot.

We also have rate decision and statement from RBNZ at 9pm GMT on Wednesday so be wary if planning to trade NZD.

Keep an eye out for any developments regarding Greece, as this is ongoing.

Technicals:

At this stage of the session, with limited news flow to present a reason to get into the markets, I will be waiting for pairs to approach key levels of support/resistance and trade the overall trend in line with the fundamentals. This will of course be in conjunction with any news flow we have that provides the market with fresh sentiment and a reason to start getting involved in the market.

Other Market Moving News:

Looking ahead, we have Preliminary UK GDP q/q expected lower than previous at 0.5%. This has the potential to provide a short term trading opportunity if it comes in with deviation outside the economists' range (0.3% - 0.9%).

Later on, Bank of Canada Governor Poloz is due to testify before the House of Commons Standing Committee on Finance, in Ottawa. His comments have the potential to cause volatility if he speaks about monetary policy or exchange rates. This may also provide direction for CAD pairs for the rest of the session.

In the North American session we have US Consumer Confidence. The market has been especially sensitive to weak US data lately, so a lower than expected reading may see the dollar sell-off continue.