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In the Zone
Today’s News Headlines
- There is talk that Brexit negotiations could conclude today, the market will be watching this with a mix of expectation and anxiety today.
After a boring day on Tuesday, the market was hoping that something could spark some life into it. The morning was dominated by much of the same and so the market chose instead to wait for the BOC meeting during the New York session. After the blockbuster jobs report last week, the market was expecting a Canadian central bank that was hawkish, some were even pricing in a hike. Instead, the BOC took a leaf out of the Fed’s book and announced they would adopt a wait and see approach to rates.
This immediately led the USDCAD to trade to 1.2807 – all the way from 1.2660. There was also a larger than expected draw in the crude oil inventories and so the weaker oil price did not help the plunging CAD. The natural instinct is to fade the move this morning, I will wait to see how London opens and I suspect that something near 1.2850 will be a more attractive entry.
Since the GBPUSD found support yesterday, the pair has traded in a 20 pip range. The 200 hour MA is trading at 1.3414 and as long as price trades below this level, the sellers will feel confident. I will be watching this level with some interest during the London session, there is also a lot of fundamental issues at play in this pair and I maintain my strategy that I am tempted to use any rally as another short entry.
Important Economic Data Due Today
15:30 USD Unemployment Claims
Effect: Actual lower than expected is good for the USD
18:00 EUR ECB Draghi Speaks
Effect: More hawkish than expected is good for the EUR