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Bounceback Friday For FX Pairs

By Boris SchlossbergForexMay 19, 2017 06:37AM ET
Bounceback Friday For FX Pairs
By Boris Schlossberg   |  May 19, 2017 06:37AM ET
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Market Drivers May 19, 2017

  • Cable rebounds to 1.3000
  • EUR trades near short term highs
  • Nikkei 0.19% DAX 0.30%
  • Oil $49/bbl
  • Gold $1250/oz.

Europe and Asia
NZD: CC Spending 6.4% vs. 7.2%
EUR: CA 34B vs. 32B

North America:
CAD: CPI 8:30
CAD: Retail Sales 8:30

After a very volatile session yesterday that saw a mini flash crash in the pound, trading in the currency market was decidedly more orderly today with most of the majors recovering their losses and cable retaking the key 1.3000 level by mid-morning London trade.

Yesterday’s flash crash in the pound still remains a mystery with fake news from Zerohedge cited as one possible reason. (The website posted a video that claimed James Comey admitted under oath that he knew of no interference in Russia probe. But the video was taken out of context as Mr. Comey was specifically referring to DOJ rather than the White House).

In either case, currencies stabilized and rallied against the buck once again with risk flows seemingly the prime driver today. Both EUR/USD and GBP/USD were well bid and USD/JPY traded back above 111.50 suggesting that FX traders were taking their cues from the equity markets.

With no major economic events in Asia or Europe, there was no newsflow to move markets and the North American session is barren as well with only Canadian data on the docket. In Canada, the market will get a look at the CPI data and Retail Sales both of which are expected to rebound. The loonie appears to have found a near-term bottom as oil prices have stabilized near the $49/bbl rate and could now make a ran towards the 1.3500 level if the data proves to be supportive.

As for the greenback, the single currency remains under pressure but mainly from political rather economic risk. Every day this week the market has seen news bombs out of Washington as the investigation into the Trump administration generated one sensational claim after the next. With the President scheduled to leave for his trip overseas and with no further action from Congress until next week, the markets may finally see a no-drama day. If risk appetite remains positive both euro and sterling could extend their gains, but given the situation in Washington, any negative news could upend the market once again.

Bounceback Friday For FX Pairs
Bounceback Friday For FX Pairs

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Marc Mosqueda
Marc Mosqueda May 20, 2017 12:51AM ET
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I read your commentary on Friday along with your business colleague at BK Asset management Kathy Lein. Thank you for deciphering Trump news into next week. I also read your backgrounds and finally found a site with two traders I can relate to. I have been trading currency pairs since 2010 into 2011 while attending Ashford University online and into my junior year. My first broker FXCM and then Oanda learning on a micro account. ..I am continually learning how to catch profits in the spot forex markets. I also love trading options and found a great group of traders to learn from at CEO Andrew Keene former floor trader. I will take advantage of your FREE Euro Trading Strategy and time permitting will read the both of your books.
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