NY Open: US dollar dancing the 'no-data' two-step

Michael O’Neill

FX Trader, Loonieviews.net

Summary:  The USD is going nowhere in a hurry as the market awaits some fresh data to enliven the scene. Meanwhile, Wall Street is clawing back opening losses and oil prices have snapped last week’s downtrend.


“Dollar up, dollar down, positions are moving ‘round and ’round.”  American’s and Canadian’s returned to work after a long weekend and found plenty of angst, an empty data cupboard and little reason to get involved.

The US dollar at 1400 GMT is relatively unchanged since the New York open despite somewhat choppy trading.  EURUSD broke below 1.1460 support, touched 1.1433 and is hovering around 1.1450.  Prices are weighed down by ongoing risk aversion trades due to US/China trade concerns, yesterday’s China equity melt-down and rising Treasury yields.

Being a “slow news day,” the US dollar may have gotten a bit of support from Dallas Fed President Robert Kaplan who said he was comfortable with three more rate hikes over the next year, as it reminded traders that ECB rates weren’t going anywhere until next summer.  The EU and Italy budget disagreement is another EURUSD negative.  The intraday EURUSD technicals are bearish while prices are below 1.1500, a level being guarded by minor resistance in the 1.1460-70 area.  A break below 1.1420 targets 1.1290.

Wall Street is clawing back opening losses.  The Nasdaq is in positive territory, S&P 500 is flat and the DJIA, while in the red is above its worst levels.  The improvement came as 10-year Treasury yields slipped from their European peak. 

Oil prices snapped last week’s downtrend.  WTI rallied from $73.08/barrel yesterday to $74.99/b just before the New York opening thanks to Hurricane Michael interrupting US Gulf coast production.  Prices were also supported by reports that Iran crude exports had fallen.  The Canadian dollar is not getting any support from the higher prices due to the enormous discount between Western Canada Select (WCS) and WTI which touched CAD 53.25 on Friday.

Chart EURUSD 30 minute

 
Enlarge
Source: Mocaz Charts

You can access both of our platforms from a single Saxo account.

Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)