background image background image background image

NY Open: That's a wrap

Forex 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  A good start for the larger G-10 currencies turned to a reversal later this session when profit-taking boosted the greenback across the board.


The major G-10 currencies had a good week. The Australian and New Zealand dollars gained 1.56% and 1.49% respectively, compared to last Friday’s New York close. The Canadian dollar rose 1.4%, and the euro increased 1.2%. However, those gains were at the New York open. Since then profit taking has boosted the greenback across the board with EURUSD down 0.62% since the open.

Wall Street erased yesterday’s gains by 15:00 GMT and unlike yesterday, will probably close in the red. That’s because traders have accrued some decent profits this week and there is a lot of event risk ahead, including US government drama and the UK Brexit-deal vote. This morning's US CPI data didn’t have any impact. CPI fell 0.1% due to lower oil prices.

Former US President Ronald Reagan was sometimes called the “Great Communicator.” It is very unlikely that Fed Chair Jerome Powell will be referred to that way. He muddled the message from the December 19 Federal Open Market Committee meeting. Since then, he has been doing damage control, going from saying the Fed would continue to gradually raise rates to: “We are in a place where we can be patient and flexible and wait and see what does evolve,” yesterday. That sentiment echoed what other FOMC members were saying and was almost identical to his January 4 comments. Wall Street rallied all week but may use the weekend as an excuse to book some profits.

Next week should provide plenty of opportunity for traders. The UK parliament vote on Theresa May’s Brexit plan may be the highlight of the week unless President Trump does something stupid. GBPUSD soared Friday helped by an Evening Standard report that Brexit would be delayed. Most pundits believe Theresa May will lose Tuesday’s parliamentary vote. A JPMorgan analyst predicted a 4% GBPUSD rally if, Ms May achieves a surprise victory. Whatever happens, GBPUSD trading will be chaos.

There are plenty of inflation reports on the docket including those from the UK, US, Canada, Eurozone, and Japan. The UK data will be lost in the Brexit drama while the US data might not even arrive because of the government shutdown. Monday’s China Trade data will serve to keep the focus on the Beijing/Washington trade talks.

Chart: USDX 30 minute, 1 week.  Source: Saxo Bank
Disclaimer

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged foreign exchange trading); Type 4 Regulated Activity (Advising on securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.