The big news in the markets is the Monday morning jump and price gap on Crude Oil after non-OPEC and OPEC members announced production cuts over the weekend.
From the standpoint of News Sentiment, our Market Alerts have caught quite a few big moves on Oil including 4 during this last week and the gap and the drop from its peak at $55.50 early Monday morning.
Of course, the rise in Crude has, as always, helped bolster the Loonie. USDCAD dropped on the weekly opening and News Sentiment is bearish as we head into an important area of support at $1.31.
If you are looking to trade the Canadian Dollar this week, keep an eye on the price of oil and look out for Crude Oil Inventories Wednesday, Canadian Manufacturing Sales data Thursday followed three hours later by a statement from the BoC governor.
As you can see from the Economic Calendar, there is a lot going on this week.
Let’s get started with the Pound and today we will have annual CPI numbers, tomorrow third quarter Average Earnings Index and Unemployment Claims, followed by a statement from Mark Carney.
Thursday sees UK Retail Sales figures and an Interest Rate decision where we don’t expect to see any change.
News Sentiment is generally neutral right now on the Pound and mid-Bearish on EURGBP.
If we back out and look at the Daily Charts we can see that EURGBP is sitting at an important level of support, Cable could go either way and GBPJPY has regained more than half of its price action that it lost post-Brexit.
Always being curious about the Australian Dollar – Copper Correlation, we can see a fully Bullish News Sentiment on AUDUSD and price has been stuck at a key level of resistance at around $0.75 for over 3 weeks. With higher lows we are watching an ascending triangle developing here and a symmetrical pennant on Copper. Let’s see which one breaks first.
In that regard watch out Thursday with Australian Employment data due out.
News Sentiment is mixed on the USD Majors showing USD strength against the Yen, which confirms this reversal off an upward trend line, and weakness against the Kiwi and Pound.
This week we have quite a catalogue of news coming out of Washington with Retail Sales and PPI data out tomorrow followed by an FOMC statement due where everyone is expecting a rise in Interest Rates. This will cause a lot of volatility and, likely, a lack of liquidity so be wary of any open positions in any currency pair.
Thursday we have CPI, Manufacturing and Unemployment Claims data and Friday we will find out about new US Building Permits.
Looking at the Indices we can see by the charts that globally we have been on a Bull run since the beginning of last week with a few new record highs. Some analysts are pinning this to the impending US Interest rate rise.
However, News Sentiment is extremely Bearish on the CAC, the DAX, the FTSE and NASDAQ so we might be in a fragile situation if one or more of this week’s news events don’t go as planned.