| Currency <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> | Daily Percentage Change (%) | Intraday High | Intraday Low | Day's Range (pips) |
| AUDCAD | +0.5% | 0.8447 | 0.8381 | 66 |
| EURCAD | +0.4% | 1.4232 | 1.4136 | 96 |
GBPUSD | +0.5% | 1.8996 | 1.8860 | 136 |
AUDCAD<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Aussie strength was witnessed on the day even as gold contracts took a beating as traders sided more with a decline in metals than a dip in crude oil prices. Lending to Canadian dollar weakness, traders pared back long positions in crude contracts as it became increasingly clear that Tropical Storm Ernesto was weakening and moving out of the direction of the Gulf of Mexico. With the lack of economic data boosting the Canadian underlying, the markets have recently drawn the correlation card, speculating on the effects of crude oil prices on the Canadian region.
Separately, traders are likely positioning themselves ahead of the leading economic index report due out in the overnight. A higher mark on leading indicators will likely boost further carry trade speculation as the market continues to anticipate another 25 basis point rate hike before yearend by the RBA. Conversely, this is competitive t the fact that the Bank of Canada is likely not deciding on higher rates before yearend.
Forming a textbook double top, the cross is ripe for a full pullback on a break of the 0.8430 figure. Below, barriers are likely to be formidable with bids emerging at the 0.8420 and 0.8410 figure fighting a downward onslaught. Subsequently, momentum would likely taper off at the bottom of 0.8380, capping further downside direction before bids re-emerge.
EURCAD
Aussie strength was witnessed on the day even as gold contracts took a beating as traders sided more with a decline in metals than a dip in crude oil prices. Lending to Canadian dollar weakness, traders pared back long positions in crude contracts as it became increasingly clear that Tropical Storm Ernesto was weakening and moving out of the direction of the Gulf of Mexico. With the lack of economic data boosting the Canadian underlying, the markets have recently drawn the correlation card, speculating on the effects of crude oil prices on the Canadian region.
Separately, traders are likely positioning themselves ahead of the leading economic index report due out in the overnight. A higher mark on leading indicators will likely boost further carry trade speculation as the market continues to anticipate another 25 basis point rate hike before yearend by the RBA. Conversely, this is competitive t the fact that the Bank of Canada is likely not deciding on higher rates before yearend.
Forming a textbook double top, the cross is ripe for a full pullback on a break of the 0.8430 figure. Below, barriers are likely to be formidable with bids emerging at the 0.8420 and 0.8410 figure fighting a downward onslaught. Subsequently, momentum would likely taper off at the bottom of 0.8380, capping further downside direction before bids re-emerge.
Traders bought sterling on the day as cross action boosted the major on a bank holiday. Thin volume and interest didnt deter the pound enthusiast as buying momentum accelerated in the overnight following a break above a key technical level in the GBPJPY. Carry traders still enamored with the wide differential of the two currencies picked up the GBPJPY through the 221.50 figure, hitting stops bundled at the 221.65. With no economic data for the next two sessions, the momentum is likely to keep the underlying bid following a probable bout of profit taking ahead of Wednesdays consumer credit report and the CBI distributive trades report. Both are expected to be in favor of the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />UK expansion as well increasing the likelihood of a rate hike at the end of the year.
Already pulling back from the days momentum, the price action currently hovers the 1.8931 (38.2 percent fib from the days move) and is likely to move lower through to continue the range bound picture painted over the past few weeks. Currently with bottom side support forming at the 1.8833 figure, a probable retracement can be seen in that area over the next few sessions. However, in order for full confirmation, the 1.8894 will likely have to be broken through, lest bulls run prematurely to retest the 1.8992 top.
