Global risk sentiment shifts to negative after weak North American economic data, making the drop in CAD/JPY one to watch for the rest of the session.
|Equity Markets||Bond Yields||Commodities & Crypto|
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FTSE: 7201.56 +0.15%
S&P500: 2734.13 -0.69%
DJIA: 25368.03 -0.69%
|US 10-yr 2.646% -0.06
Bund 10-YR 0.093% -0.029
UK 10-YR: 1.129% -0.054
JPN 10-YR: -0.008% +0.005
|Oil: 53.40 -0.93%
Gold: 1314.00 -0.08%
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Fresh Market Headlines & Economic data:
- U.S.-China trade talks move to higher level as deadline looms
- Dow set to fall 100 points as biggest retail sales drop in a decade thwarts US-China trade optimism
- Eurozone GDP Growth Slows To 1.2% In Fourth Quarter Of 2018
- German economy likely to see moderate growth in 2019 – ZEW chief
- BOE Vlieghe Says Loose BOE Policy More Apt in No Deal Brexit
- Watch live: UK parliament holds debate on Brexit
- Brexit: No 10 says Tory revolt could damage EU talks
- Japan Q4 annualised GDP up 1.4 pct
- Producer Prices in Switzerland decreased to 101.70 in Jan. of 2019 from 102.50 in Dec. of 2018
- Australia Inflation Expectations Higher in February
- Statistics Canada reports manufacturing sales down 1.3 per cent in December
- China January trade data beats forecasts, but sustainability in doubt
Upcoming Potential Catalysts on the Forex Calendar:
- Fed ‘s Harker speaks in Newark at 4:00 pm GMT
- RBA’s Kent speaks in Melbourne at 8:45 pm GMT
- New Zealand Internation Travel and Migration at 9:45 pm GMT
- China CPI and PPI at 1:30 am GMT (Feb. 15)
- Japan Industrial Production at 4:30 am GMT (Feb. 15)
- U.K. Retail Sales at 9:30 am GMT (Feb. 15)
What to Watch: CAD/JPY
Fast moves for Loonie pairs in the morning U.S. session after a big negative surprise from Statistics Canada that manufacturing sales were down 1.3% in December. We’re also seeing a broad shift in risk sentiment to the negative after U.S. retail sales data shows the biggest drop in a decade, obviously taking focus away from the positive sentiment stemming from the U.S.-China trade negotiations over the last few sessions.
With weak Canadian data and risk-off sentiment in the driver’s seat, we’re throwing CAD/JPY onto the watchlist, especially after the big drop after the weak CA manufacturing sales data. The pair is testing the major psychological level at 83.00 after falling from trading just under the 84.00 handle before the news, and it’s a level that’s held as support/resistance since the beginning of February. The question now is whether this pair will break lower, or are there profit takers or fresh buyers to take the pair higher?
With the move being sparked by fresh news and countering recent positive sentiment, the lean is likely to be to the downside for now. But from this point after a big drop, it’s probably a good idea to watch for a bounce to around the 83.30 – 83.50 area and see resistance patterns form, or a solid break/sustain lower before making moves if you’re still bearish on CAD/JPY.
For the bulls, you may be able to catch a bounce here on profit taking, but with a nearly empty calendar, it’ll take some surprise news on the U.S.-China trade story, an oil supply drop, or maybe even news avoiding a “no-deal” Brexit scenario to get sustained buying to come back. All low probability situations for the rest of the session.