- US NAHB house price index: 64 vs. 62 expected, 61 previous
- Fed’s Williams favors a 2015 rate hike
- CAD lower on weaker oil, uncertainty over election
- RBA meeting minutes on tap
Forex price action was a mixed bag of nuts, as a lack of major news reports turned traders’ attention to positioning ahead of this week’s potential market movers.
The biggest story of the hour was the Loonie’s drop across the board. We don’t have far to look for the culprits. Unless you’ve been living under a rock, then you should know that Canada is having its Federal election.
So far polls are showing that Prime Minister Stephen Harper’s government might be reduced to a minority, if not ousted, with rival Liberal Justin Trudeau in the lead. If there’s one thing we know about elections it’s that the markets don’t like instability. Of course, it also didn’t help that oil prices tumbled the most in two weeks on the back of weaker-than-expected Chinese data and a possible deal with Iran.
USD/CAD rocketed by 91 pips (+0.70%) to 1.3019 while CAD/JPY slid by 53 pips (-0.57%) to 91.83. EUR/CAD also popped up by a whopping 106 pips (+0.72%) to 1.4746 while GBP/CAD also saw a 123-pip gain (+0.62%) to 2.0137. Heck, even AUD/CAD rose by 25 pips (+0.27%) to .9434!
The other major currencies weren’t as decisive with their directions although the euro did gain a few pips against its counterparts. One possible explanation is profit-taking after receiving hits from the earlier trading sessions. If you recall, traders are now trying to position themselves ahead of the ECB’s monetary policy decision on Thursday.
EUR/USD recovered from its 1.1306 intraday low to close at 1.1327 while EUR/GBP rose from a low of .7304 to its .7323 closing price. Even EUR/JPY inched 18 pips (+0.13%) to 135.41.
Let’s see if today’s Asian session forex traders could give better clues on where the major currencies will go over the next couple of days. Australia is set to print the RBA’s monetary policy meeting minutes. The central bank didn’t make any changes to its policies earlier this month although the members don’t seem to shy away from the possibility of further easing. If we do see dovishness from the report, then the Aussie might snap out of its reprieve and continue falling especially after yesterday’s less-than-stellar Chinese data.
Good luck and good trading, folks!
Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. Some things just go well together.
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