Loonie Bid as US Drops Sanction Waivers
The most volatile pair for Easter Monday, USDCAD, fell 30 pips from its daily open at $1.3380. This came after a news article from The Washington Post said that the US will announce the end of sanction waivers on Iranian oil.
The Canadian dollar could end up being the best performer for the day thanks to the oil rally. At the time of writing, the price of USDCAD is softening down to last Thursday’s open.
Dollar Lower Ahead of US Open
The US dollar started the week off on somewhat weak footing, the US Index shows. But note that none of today’s moves provide any meaningful information on dollar sentiment as markets lack liquidity around holiday trading.
With a relatively light calendar and US markets (except US Existing Home Sales), the index could end the session mixed, and even with a negative tone below 97.
Euro Bulls Take Advantage of Thin Liquidity
The European session is rather slow this afternoon with market participants taking advantage of thin liquidity levels. EURUSD trades above its daily low at $1.1230 and closer to the $1.1250 psychological barrier on its latest attempt to recover some of last Thursday’s steep losses.
EURUSD declined over 60 pips last week on the back of poor PMIs.It also bounced off at the $1.12 psychological support, which seems to hold firm.
Risk Down, Safety Up
Despite oil and loonie are heading higher and the US dollar lower, Aussie and Kiwi are lagging considering the geopolitical news. In fact, they trade inversely when one would expect to see the commodity bloc currencies move alongside crude.
AUDUSD continues to correct from last week’s rejection at 72c. Meanwhile, NZDUSD flirts with last week’s lows near 0.6665 while no micro-flows weigh down both pairs.
Gold, on the other hand, heads towards a potential retest level at $1282, but still a few dollars below. The rejection at the said level could revalidate the bearish sentiment.
Equities End Winning Streak But Look Bid
From Thursday onwards the S&P500 traded mixed. Volatility was low, and volumes didn’t do much as they were limited. The end to the 3-week streak formed an indecision candle on the weekly timeframe and now markets could correct provided both 2895 and 2887 give in to bearish pressures.
A correction from this point forward could validate the head and shoulders pattern we waited for. Then, prices could reach fresh all-time highs.
Despite an attempt to reclaim a new record, mixed earnings results and the Easter holiday wrapped up trading activity. We expect to see more from tomorrow, Tuesday, onwards.