MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
A very quiet start to the week, with little in the way of economic releases overnight and this morning to influence broader price action. Nevertheless, sentiment has been quite positive with risk related currencies benefiting from the flows back into US equities. The Australian Dollar has been the star performer on the day, while the Yen has been the major underperformer. More focus has been in the commodity markets today, with oil tracking some 3% higher and looking to consider establishing itself above the $60 mark. Warnings of production cuts from Iranian President Ahmadinejad along with more talk from OPEC’s President have been sourced as the primary catalyst for the bid tone. ECB Provopoulos was also on the wires earlier warning that even though he saw signs of green shoots, any recovery would be at very slow levels. US equities are all well higher on the day, with the DJIA leading, up some 1.65%. Looking ahead, Treasury Secretary Geithner is slated to speak at 15:30GMT followed by NAHB housing (16 expected) at 17:00GMT. Eur/Usd has been well offered this morning above 1.3500 and there is talk of more selling into the London fix.
ANALYSIS OF SELECTED RATES
Eur/Cad: We continue to favor buying the cross on dips and after putting in a bullish reversal week, any dips on Monday should be used as compelling buy opportunities. Hourly studies are well oversold as we head into the London fix, and we would recommend looking to establish a long position by 1.5700, just over the 50% fib retracement off of the 1.5465-1.6010 move. We are not however taking any formal positions.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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