It’s a “King CAD” kind of day in the FX market, with the loonie rallying against all of her major rivals. The proximate catalyst is (wait for it) the latest scuttlebutt about the North American Free Trade Agreement (NAFTA).
It ’s often a complicated question, and when it comes to markets, the “why” often takes a backseat to the “what” that is happening and “how” it should be traded. Nonetheless, it can be worthwhile to understand why a market relationship occurs, so that you can adjust more quickly than the competition when the relationship inevitably changes.
This was a monster session for the Euro gaining almost a penny. The move started early this morning when French GDP beat expectations and picked up further steam on hawkish comments from German Bundesbank President Weidmann. The yen took a bath today after crossing the .9600 mark on Friday for the first time since November 2016. The dollar was surely not culprit today as the yen was the only currency to truly lose ground against it.
Since the beginning of the month all battles between bulls and bears run in a fairly narrow area, which unfortunately doesn’t create good investment opportunities. In today's alert, we looked at the broader perspective of EUR/USD and the USD Index itself.
The euro/Japanese yen (EUR/JPY) currency pair is currently sharply falling away from 132.43 level, which made me think, that maybe a bigger EW flat correction can be in the making within wave B.
The euro finished the session down a penny after comments from ECB President Mario Draghi warned of ‘protectionism’.
After the ECB’s dovish press conference the euro fell across the board, even against the Canadian dollar. The commodity currency has taken a beating of its own in recent weeks amid fears over protectionist U.S. policies, renewed weakness in oil prices and soft domestic data.
All things considered, the Euro reacted in a very quiet manner to today’s news. A strong read on private ADP Payrolls along with better than expected Nonfarm Productivity and Unit Labor Costs supported the dollar this morning.
The euro put in a strong session today as optimism gathers behind Thursday’s ECB meeting and trade tariff news weighs on the U.S. dollar.
The combination of several resistances turned out to be a too big challenge for the buyers at the end of the previous week, which resulted in a decline in the greenback on the following days.