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USDCAD TECHS

Watching The 50-Day EMA

AUDUSD TECHS

Bearish Focus

MONTH-END EXTENSIONS

Updated Barclays/Bbg Extension Estimates for US

US TSYS

Late Session Selling

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  • Heightened volatility in oil/equity markets provided a nervy backdrop for currency markets to start the week.
  • Initially, the greenback was haven of choice with the dollar index firming roughly half a percent throughout European trading hours, however, risk-off flows were superseded by JPY strength in the early stages of Monday's New York session, while also filtering through to EMFX weakness.
  • The sharp turnaround in the dollar was attributed to the aggressive move lower in US yields, which prompted EURUSD to entirely erase the day's losses to trade from 1.1764 to 1.1824 in quick fashion before consolidating around the 1.18 mark, as EUR crosses benefited on the day.
  • USDJPY took out the most recent support through 109.53, to fresh lows of 109.07 in anticipation of the US cash equity open and despite a mild recovery, remains 0.6% worse off.
  • Particular weakness was seen in commodity currencies with antipodeans retreating just shy of 1%, however, the notable laggard was the Canadian dollar. Pressured by the magnitude of the oil price drop (WTI down 7.5%), USDCAD rose to levels not seen since early February, above 1.28. CADJPY stands out, down 1.75% on Monday, but also having matched the April lows at 85.43 as the pair continues its downward trajectory.
  • Some late headlines from the CDC raising the Covid warning to level four for travellers to the UK, underscores the heavy price action for the Pound. Moving average studies remain in bear mode for GBPUSD with the technical bear trigger currently being probed at 1.3669, the April 12 low.
  • The minutes of the latest RBA meeting will be published overnight, while tomorrow's light US calendar includes US building permits and housing starts.