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A more defensive risk posture is the name of the game as we get things going in the new week with the Canadian dollar in particular looking rather vulnerable.
USD/CAD looks poised to break above its 200-day moving average for the first time in a year, nearing 1.2650 currently with CAD/JPY also sinking to its lowest levels since April as it breaches support @ 87.10 to start European trading.
Oil is down 1% as OPEC+ formalises a deal so that isn’t helping the loonie, though many houses are still calling for higher prices to follow in the months ahead.
I would expect risk sentiment to be the key driver this week, as there isn’t much besides a likely non-event in the upcoming ECB meeting on Thursday.
Amid earnings season, equities may see some room for choppiness but after having kept close to and at around all-time highs in the past two week, there might be room for some profit taking and light pullback in the days ahead perhaps.
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