Will JPY longs continue to unwind? See a forecastto find out!
- CAD falls aggressively to 14-month lows on fears of protectionist trade position from a US
- EUR/JPY becomes a hottest trade of a week in expectation of certain ECB on Thursday
- Crude Oil revisits 200-DMA
Join Tyler in his Daily Closing Bell webinars during 3 pm ETto plead marketplace developments.
After most fad about EUR/JPY on Monday, that continued aloft today, Tuesday’s concentration was on a North American Free Trade Agreement or NAFTA renegotiations. This news took a Canadian Dollar to a lowest turn given Feb 2016 opposite a USD as a US commerce dialect released a 20% countervailing avocation on Canadian lumber exports. Despite a terribly tiny impactthat lumber creates of sum exports and furthermore of Canadian GDP, this news increased market fears of a US-CA trade conflict,and a Mexican Peso also forsaken to one–month lows.
Given that Oil has depressed behind to a 200-DMA, traders would do good to compensate tighten courtesy to a subsequent large move. Oil has a new story of aggressively rising from a 200-DMA. However, new news has been putting vigour on Oil, and a mangle next a 200-DMA could see USOil pierce to a lower-$40/bbl zone. Such a pierce could exasperate CAD bears.
Lastly, forward of a Thursday ECB meeting, EUR is stability to find a bid as options traders are display they no longer fear EUR-downside like they once did. Two certain developments are a EURJPY 25D Risk Reversals over 1-month is during a top levels in over a month, and a 1-year 25D Risk Reversals have risen 28% this week per Bloomberg to trade during their top levels given Jan 2015. While a ECB could retreat this march with a apocalyptic outlook, a options marketplace seems to be bearing EUR upside from here.
Interested in saying what IG client’s positioning means for a EUR breakout? Find out here!
Closing Bell’s Top Chart: April 25, 2017, USD/CAD Breaks section of insurgency to new 14-month highs
Tomorrow’s Main Event: Australian CPI RBA Governor Lowe Speech
Wednesday will yield a double-shot of fad to traders holding AUD exposure. CPI is set to come out during 01:30 GMT with YoY expectations display a odds of upside risk in a Aussie notwithstanding new weakness. AUD could float a new arise in risk perspective after a French choosing has seen a JPY sell-off and bottom metals find support. After CPI, a speech by RBA Governor Lowe during a Renminbi Global Cities Dialogue could assistance yield clarity and upside for AUD on AUs position economically with China.
IG Trader Sentiment Highlight:USD/CAD Bears 14-Month Highs
USDCAD: As of Apr 25, sell trader information shows 34.0% of traders are net-long with a ratio of traders brief to prolonged during 1.94 to 1. The series of traders net-long is 36.0% aloft than yesterday and 13.3% reduce from final week, while a series of traders net-short is 4.6% reduce than yesterday and 76.4% aloft from final week.
We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests USDCAD prices might continue to rise. Positioning is reduction net-short than yesterday though some-more net-short from final week. The multiple of stream perspective and new changes gives us a serve churned USDCAD trade bias. (Emphasis Mine)
Written by Tyler Yell, CMT, Currency Analyst Trading Instructor for DailyFX.com
To accept Tyler’s research directly around email, greatfully SIGN UP HERE
Contact and plead markets with Tyler on Twitter: @ForexYell