Take control of your international payments with CXI FX Now.
• Zero transfer fees & great rates
• Fast international payments
• Safety and security
• Unparalleled customer service
• Consultative approach
Learn more about CXI's international payment services for businesses or call our trading desk directly at 1-833-572-8933.
Get real-time market coverage on twitter at @EBCTradeDesk or sign up here.
SUMMARY
• Bank of Canada interest rate decision and Monetary Policy Report at 10amET as well. Press conference at 10:15amET.
• USDCAD overnight options pricing predicting 70-80pt intra-day range.
• August crude 2% higher after weekly API reports shows larger than expected oil inventory draw.
• Weekly EIA oil inventory report at 10:30amET. Fed’s Bullard speaks at 1:30pmET. FOMC Minutes at 2pmET.
• Global bond yields continue to show anxiety ahead of Powell. US 10s back up to 2.10%. German bunds back to -0.30%.
• UK May Industrial Production and Manufacturing Production figures miss expectations. UK May GDP comes in +0.3% MoM.
ANALYSIS
USDCAD
Dollar/CAD sits at familiar chart resistance in the 1.3120-30s this morning as the broader USD enters a lull ahead of a huge day of news. First up will be the text of Jerome Powell’s speech before the US House Financial Services Committee (to be released at 8:30amET). The Fed chairman will then begin speaking at 10amET. The 10am hour will also feature the Bank of Canada’s latest interest rate decision, following by a press conference at 10:15amET. The weekly EIA oil inventory report comes next at 10:30amET, where traders will be expecting a similar draw to what the API reported last night. The Fed’s Bullard will be speaking at 1:30pmET and finally we’ll get the Minutes from the last Fed meeting at 2pmET. Global bond markets continue to exhibit anxiety ahead of Powell, by virtue of US 10yr yields bouncing to 2.10% and German bund yields bouncing to -0.30%, but we think there’s a good chance the “Fed rate-cut trade” can recover here should the Fed chairman deliver dovish, or even confusing testimony. The Bank of Canada is expected to keep rates on hold and to talk up the Canadian economy. The key, in our opinion here, is how “negatively” Stephen Poloz describes what’s going on globally with trade uncertainty. We think an even more cautious tone could spook the funds, who have just recently flipped to a net short position in USDCAD.
USDCAD DAILY
![USDCAD DAILY](/upload/blog/images/file/4682/usdcadd_710.jpg)
USDCAD HOURLY
![USDCAD HOURLY](/upload/blog/images/file/4683/usdcadh_710.jpg)
AUG CRUDE OIL DAILY
![AUG CRUDE OIL DAILY](/upload/blog/images/file/4686/augcrudeoild_710.jpg)
EURUSD
Rising bund yields seemed to caring EURUSD back above the important 1.1200 support level in early European trade today but trend-line chart resistance in the 1.1220s is capping as we head into NY trade. With momentum now swinging downward ahead of Powell, we have to wonder if the Fed chairman will try to kill the rate cut doves here.
EURUSD DAILY
![EURUSD DAILY](/upload/blog/images/file/4684/eurusdd_710.jpg)
EURUSD HOURLY
![EURUSD HOURLY](/upload/blog/images/file/4685/eurusdh_710.jpg)
AUG GOLD DAILY
![AUG GOLD DAILY](/upload/blog/images/file/4687/auggoldd_710.jpg)
GBPUSD
Sterling is rebounding this morning as well as UK 10yr gilt yields bounce higher to +0.78%. Today’s weaker than expected Industrial Production and Manufacturing Production figures out of the UK for May were far from positive (+1.4% MoM vs 1.5% exp and +1.4% MoM vs +2.1% exp respectively). The UK reported May GDP in line with expectations of +0.3% MoM, which seemed to be a non-event for traders. We think today’s move so far has more to do with pre-Powell positioning.
GBPUSD DAILY
![GBPUSD DAILY](/upload/blog/images/file/4688/gbpusdd_710.jpg)
GBPUSD HOURLY
![GBPUSD HOURLY](/upload/blog/images/file/4689/gbpusdh_710.jpg)
EURGBP DAILY
![EURGBP DAILY](/upload/blog/images/file/4690/eurgbpd_710.jpg)
AUDUSD
The Aussie is finding itself in a bit of trouble this morning, technically speaking, after the 0.6930-40 support level gave way in NY trade yesterday. Last night’s awful Westpac Consumer Confidence reading for July (-4.1% vs -0.6% for June) follows the weak NAB survey from the day before, and is not doing wonders for AUD sentiment in our opinion. A dovish Powell needs to come to rescue for AUDUSD here, otherwise we could see the fund shorts take charge again and push this market below the 0.6900 level.
AUDUSD DAILY
![AUDUSD DAILY](/upload/blog/images/file/4691/audusdd_710.jpg)
AUDUSD HOURLY
![AUDUSD HOURLY](/upload/blog/images/file/4692/audusdh_710.jpg)
SEP COPPER DAILY
![SEP COPPER DAILY](/upload/blog/images/file/4693/sepcopperd_710.jpg)
USDJPY
Dollar/yen continues its drift ever so slightly higher this morning as global bond yields continue to reflect some angst that Powell will not be a dovish as he was at the last Fed meeting. We think Fibonacci chart resistance at the 109.05 level gets tested to the upside today and we think this level will become the pivot for price action for the rest of the week.
USDJPY DAILY
![USDJPY DAILY](/upload/blog/images/file/4694/usdjpyd_710.jpg)
USDJPY HOURLY
![USDJPY HOURLY](/upload/blog/images/file/4695/usdjpyh_710.jpg)
DEC 3-MONTH EURODOLLARS DAILY
![DEC 3-MONTH EURODOLLARS DAILY](/upload/blog/images/file/4696/dec3moeurodollarsd_710.jpg)
Charts: TWS Workspace
About the Author
Erik Bregar - Director, Head of FX Strategy
Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.
Interested in creating a custom foreign exchange trading plan? Contact us or call CXI's trading desk directly at 1-833-572-8933.
About Currency Exchange International
Currency Exchange International, CXI, is the leading provider of comprehensive foreign exchange services, risk management solutions and integrated international payments processing technology in North America. CXI’s relationship-driven approach ensures clients receive tailored solutions and world-class customer service. Through innovative and trusted FX software platforms, CXI delivers versatile foreign exchange services to our clients, so that they can efficiently manage and streamline their foreign currency and global payment needs. CXI is a trusted partner among financial institutions, corporations and retail markets around the world. To learn more, visit: www.ceifx.com
Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.
This publication has been prepared by Currency Exchange International for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Currency Exchange International, its affiliates or any of their employees incur any responsibility. Neither Currency Exchange International nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Currency Exchange International products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Currency Exchange International.