“Oh, when the Saints go marching in.”  It is All Saints Day and a public holiday in many European centres, which served to reduce liquidity a tad.  It was also a good day to be an equity bull, a dollar bear and long Sterling.  The US dollar is lower across the board.

GBP

GBPUSD soared from 1.2764 in early Asia trading to 1.2918 in Europe.  UK Brexit secretary Dominic Raab that a deal with the EU could be finalized by November 21.  Another report says that UK Prime Minister Theresa May secured an agreement that gives UK financial firms continued access to EU markets after Brexit.  The GBPUSD rally halted at resistance at 1.2920 which guards the April downtrend line which comes into play at 1.3190.  The Bank of England policy meeting and Quarterly Inflation Report are due today.  Rates are expected to be left unchanged.

EUR

EURUSD rallied in concert with Sterling, rising from 1.1308 to 1.1387, supported by a rally in global equity indices.  The EU/Italy budget impasse is limiting EURUSD gains.

JPY 

USDJPY continued to drift higher, rising to 112.97, supported by a rebound in US Treasury yields and an improved risk tone thanks to rising equity indices.

AUD

AUDUSD was the best performing G-10 major currency, rising 1.29% to 0.7164. The gain was due to larger than forecast Australian trade surplus, news of new China stimulus and a classic “short-squeeze.”

Oil

Oil prices dropped overnight, continuing yesterday’s slide after the EIA reported a 3.22 million barrel increase in US crude inventories. Weak China data fueled concerns that supplies were increasing as demand was falling.  WTI dropped from $66.94/barrel on Wednesday to $64.68/b today.

CAD

The Canadian dollar got beaten up yesterday, despite posting a better than expected August GDP result.  The 0.1% gain was disappointing as it was mostly due to increased oilsands activity.  It wasn’t horrible but suggested the Bank of Canada could take its time when raising interest rates. USDCAD rallied but the rally stalled around resistance in the 1.3160-70 area and prices have recouped all of yesterdays losses. Today’s US data includes October ISM Manufacturing PMI (forecast 59.0 vs 59.8), Jobless Claims and Construction Spending.

The intraday USDCAD technicals flipped to bearish after failing to break above resistance in the 1.3160-70 area and subsequently dropping below 1.3130, which targets a retest of the October uptrend line at 1.3070.  A break of this level targets 1.2970.  for today, USDCAD support is at 1.3080 and 1.3040.  Resistance is at 1.3130 and then 1.3160.  Today’s Range 1.3090-1.3160