FX markets were choppy to start the last week of October, although the Asia session was subdued. No so for Asia equity markets. They were up an down and finished the day mixed to down, Australia’s ASX 200 rose 1.11% while the Shanghai Shenzhen got smacked.
EURUSD dropped from 1.1412 to 1.1361 on news the German Chancellor Angela Merkel plans to step down in December. Prices have recovered and are trading at the overnight peak in New York. US equity futures are in positive territory at the New York open.
GBPUSD has been relatively stable ahead of today’s UK Budget. Chancellor of the Exchequer Philip Hammond said that the UK would need a new budget in the event of a no-deal Brexit. Traders are already looking ahead to Thursday’s Bank of England policy meeting and quarterly inflation report.
USDJPY was steady in Asia and Europe but traded higher in early New York trading after 10 year Treasury yields rose from 3.067% to 3.09%
AUDUSD and NZDUSD have managed to hold onto their gains after touching key support levels on Friday, supported by the general softer tone to the greenback.Better than expected Australian New Home Sales data helped.
USDCAD is in limbo and traders are awaiting Governor Poloz’s speech on Tuesday, GDP data on Wednesday and the employment report on Friday. Concerns of lower oil prices offset the rising risk of a faster pace of domestic rate increases and slowing global growth from the US/China trade war. It is year end for Canadian banks on October 31, which will put a damper on domestic trading. Today’s US data includes Personal Consumption Expenditures-Price Index and Dallas Fed Manufacturing Index.
The intraday USDCAD technicals are bullish while prices are above 1.3070, looking for a break above 1.3160 to extend gains to 1.3240 and then 1.3300. A break below 1.3070 targets 1.3020 and then 1.2990. For today, USDCAD support is at 1.3070 and 1.3020. Resistance is at 1.3130 and 1.3160.
Today’s Range 1.3060-1.3130