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USDCNH leading early FX flows. Some CAD data ahead today. Watch EURUSD chart resistance.

CXI April 9th, 2018

Summary

  • USDCAD: It’s all been about the Chinese Yuan to start the week in FX markets, as an article circulated overnight about China evaluating the potential impact of gradual yuan depreciation.  This led to a quick pop higher in USDCNH around the 3am hour and USD buying against AUD and CAD (the two currencies that seem to be most affected by trade war rhetoric lately).  USDCAD was able to punch through chart resistance in the 1.2780s and rally back above 1.2800, but this move is starting to fizzle out as EURUSD finds a bid and USDCNH backs off its highs for the session.  Next up are Canadian Housing Starts for March (8:15amET); with markets expecting +218k, and then the Bank of Canada’s Q1 Business Outlook survey at 10:30amET.  CAD cross buying has been prominent this morning as well, with both EURCAD and GBPCAD building upon their Friday reversals higher.  While Friday’s closing pattern in USDCAD was half decent as well (close above 1.2770 despite double whammy of negative job headlines) and CAD crosses are supporting today, we think the market wrestles with the 1.2770-80s again today as broad USD selling looks like it might take over here.  Watch EURUSD and how it responds to chart resistance in the 1.2290s.  There is not much resistance above, so should it break, there could be a broad wave of USD selling.

Tune in @EBCTradeDesk for more real-time market coverage.

 

Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

EUR/CAD Daily Chart

GBP/CAD Daily Chart

Charts: TWS Workspace


About the Author

Erik Bregar

Erik Bregar - Director, FX Trading

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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.

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