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March 29, 2021

USDCAD open (6:00 am ET)  1.2593-97,  Overnight Range 1.2571-1.2625,  Close 1.2578

Hedge Fund gets trimmed-big losses for some big banks

Plenty of event risk in holiday-shortened week

USD opens mixed, GBP higher and EUR lower

FX Ranges at a Glance 

Source: IFXA Ltd/RP

FX Recap and Outlook

It will be an interesting week for markets.  US nonfarm payrolls data is expected to show a massive increase with forecasts ranging from 500,000 to 900,00 new jobs.  However, the report is released when most markets outside of the US are closed for Good Friday.  It is also month and quarter-end as well as year-end for Japanese companies.

 Asia equity indexes were choppy but managed to close modestly higher, except for Australia’s ASX 200, which was slightly in the red. European bourses, except the UK FTSE 1000, are higher, as are S&P 500 futures. 

Global traders were vastly entertained by news that a rather obscure hedge fund, with massive leverage, blew up, leading to chunky losses for Nomura (est. $2.0 billion), and Credit Suisse (not disclosed)

EURUSD traded with a negative bias in a narrow 1.1764-1.1794 range.   ECB officials continue to extoll the virtues of easy monetary policies. Governing Council member Pablo de Cos said maintaining a high level of accommodative monetary policy is needed so that fiscal policy can continue its support for the economy until a solid recovery is assured. Chief Economist Philip Lane said, “it is essential that the ECB acts as a stabilising force and boosts confidence by committing to the preservation of favourable financing conditions.”  The intraday EURUSD technicals are bearish below 1.1800, looking for a break of support at 1.1735 to extend losses lower.

GBPUSD rallied from 1.3758 to 1.3841, with month-end demand for GBP, and selling of EURGBP, playing a role.

USDJPY traded in a 109.39-109.80 range, with price action closely tracking US treasury yields. 10-year Treasury yields dropped from 1.672% to 1.635% before bouncing to 1.668% in NY.  Japanese year-end is March 31, which may have sucked liquidity out of the USDJPY market.

WTI oil prices are trading at the top of their $59.45-$61.44/barrel range. The EverGreen container ship is still blocking the Suez Canal, which is supporting prices.

USDCAD rallied to 1.2625 in Asia due to broad risk aversion sentiment at the start of the session but reversed course and dropped to Friday’s closing level in early NY trading.  USDCAD is weighed down by firm oil prices, collateral benefits from US stimulus package, bearish technicals below 1.2630, and from a bit of month-end USDCAD selling pressure.

The economic calendar is bare.  Traders will be cautious ahead of month-end.

USDCAD Technicals:  The intraday technicals  are bearish below the 1.2630-50 area, looking for a move below 1.2550 to set the stage for a retest of support in the 1.2400 area.  For today, support is at 1.2550 and 1.2510. Resistance is at 1.2630 and 1.2650. Todays Range 1.2550-1.2620

Chart: USDCAD daily

Source:  Saxo Bank

FX open (6:00 am EDT) High, Low, and previous close

Source:  Saxo Bank