• 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

Lagarde says "no reason to overreact to Euro gains"

Erik September 10th, 2020

Take control of your international payments with CXI FX Now.

• Low transfer fees & great rates
• Fast international payments
• Safety and security
• Unparalleled customer service
• Consultative approach

Interested in creating a custom foreign exchange trading plan? Contact us or call EBC's trading desk directly at 1-888-729-9716.

 

Get real-time market coverage on twitter at @EBCTradeDesk or sign up to currency insider here.

 

SUMMARY

  • Christine Lagarde now speaking after ECB keeps policy on hold.
  • Brexit negotiation update expected from UK’s Frost and EU’s Barnier. 
  • Extraordinary meeting of EU/UK Joint Committee also on tap today.
  • US Weekly Jobless Claims slightly miss expectations, +884k vs +846k.
  • Weekly EIA oil report at 11amET. BOC’s Macklem speaks at 12:30pmET.
  • Huge downside option expiries today for EURUSD & USDJPY at 10amET.


ANALYSIS


USDCAD

Dollar/CAD fell back below the 1.3190-1.3200 level yesterday as the S&P futures recovered even further after the cash open. While this negative technical development, in combination with the market’s double rejection of 1.3250s resistance earlier in the session, served as reminders that USDCAD’s trend was still down going into the NY close, we haven’t seen much follow-through overnight…and we think this is largely because of all the potentially negative event risk on tap for today.

This morning’s ECB press conference has kicked off with a bang after Christine Lagarde said “the data suggests a strong rebound” and “there’s no reason to overreact to Euro gains”. The weekly US jobless claims figures (for the week ending Sep 5) slightly missed expectations (+884k vs +846k) and the US core August PPIs came in hotter than expected (+0.6% MoM vs +0.3%), however we feel the ECB meeting is overshadowing this US data set for now. 

The weekly EIA oil inventory report comes out at 11amET (-1.335M barrels expected vs +2.97M from last night’s APIs). Bank of Canada Governor Tiff Macklem is expected to give an economic update, and explain yesterday’s unexciting monetary policy statement, when he speaks at the Canadian Chamber of Commerce at 12:30pmET. Finally, we should also expect Brexit headlines at some point as the latest negotiating round between the UK’s Frost and the EU’s Barnier comes to an end, and as the “extraordinary meeting” of EU/UK Joint Committee on the Withdrawal Agreement takes place.


USDCAD DAILY

USDCADD_9.9

 

USDCAD HOURLY

USDCADH_9.9


OCT CRUDE OIL DAILY

OCTCRUDEOILD_9.9



EURUSD

Euro/dollar didn’t do much of anything after the European Central Bank kept all monetary policy measures on hold (as expected) in their 7:45amET press release (see here), but it has now shot higher to trend-line resistance in the 1.1870-80s as Christine Lagarde said “there is no need to overreact to Euro gains”. 

The market’s next near term chart resistance level resides in the 1.1910s, whereas support lies at the familiar 1.1750-60s from yesterday. Over 3.4BLN in EURUSD options will be expiring between the 1.1775 and 1.1800 strikes at 10amET, although these shouldn’t come into play unless Lagarde sours the punch bowl. See here for the live link.
 

EURUSD DAILY

EURUSDD_9.9


EURUSD HOURLY

EURUSDH_9.9


SPOT GOLD DAILY

SPOTGOLDD_9.9



GBPUSD

Sterling rebounded even further yesterday morning after the EU reiterated that the UK’s latest Internal Market Bill maneuver would not cause it to walk away from trade talks. The market rallied all the way back to former support (now turned resistance) in the 1.3010-20s, but it’s been struggling at this level ever since. We’ve witnessed a quick swoosh lower in GBPUSD, on no news, since the NY open…perhaps a little anxiety ahead of what could be a litany of Brexit headlines today? 
 

GBPUSD DAILY

GBPUSDD_9.9


GBPUSD HOURLY

GBPUSDH_9.9

EURGBP DAILY

EURGBPD_9.9

AUDUSD

The Australian dollar, like the Canadian dollar, is not really in focus this morning as FX traders pay more attention to Brexit and ECB headlines…although we would note the market’s Euro-driven push above the 0.7280s resistance level, following Christine Lagarde’s initial comments, as technically positive. We think this morning’s 1BLN worth of option expiries between 0.7275 and 0.7300 strikes could also be helping to keep the Aussie bid. EURUSD’s response over the course of the ECB meeting should set the tone for AUDUSD going into the London close, and we feel that a NY close above 0.7280s could set the stage for the resumption of the Australian dollar’s uptrend.


AUDUSD DAILY

AUDUSDD_9.9

AUDUSD HOURLY

AUDUSDH_9.9

USDCNH DAILY

USDCNHD_9.9



USDJPY

Dollar/yen has predictably slipped back lower today as a massive amount of options come off the board between 105.75 and 106.00 (now over 4.4BLN in size). The 105.90-106.00 support level is still holding for now however, despite EURUSD’s spike higher, and we think this relative technical strength is noteworthy. 
 

USDJPY DAILY

USDJPYD_9.9


USDJPY HOURLY

USDJPYH_9.9


US 10YR BOND YIELD DAILY

US10YRBONDYIELDD_9.9

Charts: Reuters Eikon


About the Author

Erik Bregar Director, Head of FX Strategy at Exchange Bank of Canada

Erik Bregar - Director, Head of FX Strategy

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 the leading provider of comprehensive foreign exchange services, risk management solutions and integrated international payments processing technology in North America. CXI’s relationship-driven approach ensures clients receive tailored solutions and world-class customer service. Through innovative and trusted FX software platforms, CXI delivers versatile foreign exchange services to our clients, so that they can efficiently manage and streamline their foreign currency and global payment needs. CXI is a trusted partner among financial institutions, corporations and retail markets around the world. To learn more, visit: 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 thatthe 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