• Financial Institutions
  • Corporations
  • Travelers
  • SOLUTIONS
  • Foreign Bank Note Exchange
  • International Drafts
  • International Wire Transfers
  • Global EFT
  • Foreign Check Clearing
  • Foreign Draft Issuance
  • INDUSTRIES
  • Travel
  • Technology Companies
  • Payroll
  • Healthcare
  • Nonprofit
  • Partnerships

All eyes on Fed chairman Powell this morning

Ryan February 26th, 2019
All eyes on Fed chairman Powell this morning

 

Summary

  • USDCAD: Dollar/CAD is trading higher this morning, after the market closed above trend-line resistance in the 1.3180s yesterday.  The swift fall in crude oil prices following Trump’s tweet didn’t abate at all yesterday, and so there was little incentive for traders to sell strength as the day wore on.  The close above chart resistance, in turn, paved the way for the drift higher we have witnessed since then, and we now have a USDCAD market wrestling with another trend-line level in the 1.3210s.  April crude oil prices are trying to regain the 55.50-60s this morning, the broader USD is trading mixed and Housing Starts for December were just reported at +1.07M vs expectations of +1.25M.  The focus will now turn to Fed chairman Powell at 9:45amET, as he presents the semi-annual Monetary Policy Report before the US Senate Banking Committee.  While we don’t think Powell will be rock the boat here with regard to the Fed’s patient and data dependent outlook, we would not be surprised to see trading algorithms whipsaw the market depending on the wire headlines that are written.  We think the momentum for USDCAD remains higher for the moment.

  • EURUSD: Euro/dollar volatility continues to evaporate as traders search for catalysts to break the market out of its recent range.  A catalyst may come shortly as Fed chairman Powell takes the mic.   While we still think that a move above trend-line resistance in the 1.1360s will entice further buying, the market’s continuing inability to breach this level makes us wary of the downside in EURUSD here.

  • GBPUSD: Sterling is surging higher this morning after more reports crossed the wires overnight about Theresa May formally taking the “no-deal” Brexit option off the table.  This has been confirmed by the UK PM this morning as she speaks before parliament.  There will be another Meaningful Vote on Theresa May’s Brexit proposal on March 12, and if this vote is rejected, they’ll be too subsequent votes:  March 13 (leaving the EU without a deal) and March 14 (extending the Article 50 period).  GBPUSD traders are cheering these headlines because the odds of Brexit crashing out of Europe have now been significantly reduced.  When you combine this with pro-Brexiter Jeremy Corbyn’s backing of a 2nd Brexit referendum yesterday, it is not surprising to see a wave of GBP optimism here.  The market is currently wrestling with chart resistance in the 1.3210-25 level.  Support comes in today in the 1.3170s.  What is interesting too is that the overnight headlines starting during the NY rollover period last night (5-6pmET), and therefore produced a rare, intra-week, gap on the hourly GBPUSD chart around the 1.3110-20 area.  This could prove to be a downside magnet for price should support not hold today.

  • AUDUSD: The Aussie couldn’t manage to close above trend-line resistance in the 0.7170s yesterday, as so prices have been drifting lower ever since.  Copper prices are finally pulling back a tad after touching the 2.9750 mark on the March futures contract yesterday, and we think is dragging AUDUSD lower a bit as well.  Next up is Fed chairman Powell as his testimony before the US Senate.  We think the bulls need to see a move above the 0.7170s in short order, otherwise we could be looking at further selling down to the 0.7120s.

  • USDJPY: Dollar/yen rallied strongly yesterday, and reached the next chart resistance level in the 111.10-20s rather quickly after the S&Ps broke above 2808.  The exuberance from Trump delaying the March 1st tariff deadline didn’t last long however.  Sellers hit the S&Ps and USDJPY heading into the NY close, and this is leading to some pretty negative momentum here heading into trading today.  The weaker than expected US Housing Starts figure (just reported) is not helping at this hour.  We think the upside in USDJPY may have now run its course here and we would not be surprised to see further selling here.

Tune in @EBCTradeDesk for more real-time market coverage.

 

Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

April Crude Oil Daily Chart

EUR/USD Daily Chart

EUR/USD Hourly Chart

USD/CNH Daily Chart

GBP/USD Daily Chart

GBP/USD Hourly Chart

EUR/GBP Daily Chart

AUD/USD Daily Chart

AUD/USD Hourly Chart

March Copper Daily Chart

USD/JPY Daily Chart

USD/JPY Hourly Chart

March S&P Daily Chart

Charts: TWS Workspace


About the Author

Erik Bregar

Erik Bregar - Director, FX Trading

linkedin twitter

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact Us or call CXI's trading desk directly at 1-833-572-8933.

About Currency Exchange International
Currency Exchange International (CXI) is a leading provider of foreign currency exchange services in North America for financial institutions, corporations and travelers. Products and services for international travelers include access to buy and sell more than 90 foreign currencies, multi-currency cash passports, traveler's cheques and gold bullion coins and bars. For financial institutions and corporations, our services include the exchange of foreign currencies, international wire transfers, global EFT, the purchase and sale of foreign bank drafts, international traveler's cheques, and foreign cheque clearing through the use of CXI's innovative CEIFX web-based FX software www.ceifx.com

 

Disclaimer: All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.

 

 

This publication has been prepared by Currency Exchange International for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Currency Exchange International, its affiliates or any of their employees incur any responsibility. Neither Currency Exchange International nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Currency Exchange International products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Currency Exchange International.

 

Archive