We are looking at a quieter start to the NY session after a big day for currencies and equities. US stock futures are indicating another positive open which means that the rally in USD/JPY could continue. There are no major US economic reports scheduled for release today so risk appetite and trade headlines will determine FX flows.
GBP is the weakest currency because UK borrowing was worse than expected in August. Euro is under pressure as well due to softer PMIs. Service sector activity accelerated but manufacturing activity was weak and it drove the overall EZ composite index lower. EUR/usD could fall to 1.1740.
Canadian CPI and retail sales are the most important pieces of data on the calendar this morning and with USD/CAD consolidating above 1.2900 for the past 12 hours, we believe that the pair wants to rally after the sharp sell-off this week but of course that all depends on data. Most of the major currencies appear to be due for a pullback but NZD remains one of the strongest currencies.
*The MAIN THEMES I see today are*
-EUR, -CAD, -AUD, -JPY
mildly -GBP, +NZD
*Today’s Initial Trades*
Here’s the summary —
1. Sell AUDUSD at .7285, Stop at .7313, Target .7257
2. Buy USDCAD at 1.2916, Stop at 1.2888, Target 1.2944
3. Sell EURNZD at 1.7596, Stop at 1.7624, Target 1.7568
4. Sell EURUSD at 1.1764, Stop at 1.1792, Target 1.1736
Close ALL open day trades by 10:20AM NY / 15:20 GMT