MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
A relatively quiet morning session of trade which saw some of the overnight gains retraced as market participants looked to pare back risk. On the data front, Canadian economic releases were stronger after both international securities transactions and wholesales sales exceeded expectations, while in the US, leading indicators came out better than forecast as well. The New Zealand Dollar is the strongest currency on the day, while the Yen is the weakest. US equities have pulled back into the London fix with all major indices now only tracking marginally higher on the day. Commodities have also backed off from their highs on correlated price action. Looking ahead, Fed Lockhart is slated to speak on the economic outlook in Nashville at 17:30GMT.
ANALYSIS OF SELECTED RATES
Usd/Cad: We were stopped out of our long from 1.1205 @1.1055 this morning but have still not lost hope in the USD and will once again look for a shot to establish another long lower down. The 78.6% fib retracement off of the major 1.0785-1.1725 move comes in by 1.0985 and with daily studies now approaching oversold levels, we are compelled to look to buy on a dip below 1.1000 today in anticipation of the formation of a medium-term higher low above 1.0785. Strategy: BUY @1.0990 FOR AN OPEN OBJECTIVE, STOP @1.0760. RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON MONDAY.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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