November 10, 2020
- GBPUSD surges on House of Lords decision
- European equities give back some earlier gains, Wall Street futures are mixed
- US dollar opens mixed
FX Ranges at a Glance
Source: IFXA Ltd/RP
FX Recap and Outlook Global markets are digesting the implications of a COVID-19 vaccine, although the delivery of the product is still many months down the road.
More immediately, are concerns around the US election. Senate Majority Leader Mitch McConnell is backing Trump’s decision not to concede the election. Global equity markets are reacting like the US election drama is just all bun and no burger, while FX traders seem to think there is reason to be cautious.
GBPUSD soared, continuing its rally from 1.3120 yesterday, reaching 1.3271 in NY. The gains were fueled by news that the British House of Lords voted to remove the section of the Internal Markets Bill, that allowed UK ministers to break international law. Traders ignored comments from the government saying that they would reinstate the section when the bill returned to Commons.
EURUSD is bouncing in a 1.1780-1.1842 range. Weaker-than expected Eurozone
and German ZEW Economic Sentiment implies that a US economic rebound would outperform that of the EU, and is weighing on the single currency.
USDJPY climbed sharply after touching 103.20 yesterday, hitting 105.48 overnight. Prices were supported by positive risk sentiment from the vaccine news, and firm US Treasury yields.
NZDUSD outperformed AUDUSD with traders believing the RBNZ policy meeting will be less dovish than initially expected.
USDCAD dropped like a rock yesterday, falling to 1.2930 from Friday’s close of 1.3064, before rebounding to 1.3049 in early NY trading today. The bounce may just be temporary, especially if this bounce stays below the 1.3090 area. Vaccine hopes have boosted crude oil prices, which have undermined USDCAD.
The US data is second-tier and there are not any Canadian releases.
USDCAD Technicals: The USDCAD technicals are bearish with prices below 1.3050, a level guarding minor Fibonacci retracement target of 1.3090 (November range). The downtrend line from March is intact below 1.3330. For today, USDCAD support is at 1.3010 and 1.2960. Resistance is at 1.3050 and 1.3090. Today’s Range 1.3010-1.3090
Chart: USDCAD 4 hour
Source: Saxo Bank
FX open (6:00 am EDT) High, Low, and previous close
Source: Saxo Bank