Major’s steady whilst CAD takes a pounding after Oil plunges 5%

The Oil Trade

What Happened Yesterday

OPEC schmucks really screw up USDCAD ahead of major US data! Most major currency pairs drifted in reasonably tight ranges as the USD settled down following the release of the FED minutes yesterday.

It’s to be expected with the US GDP and Durable goods data scheduled for release later today.

 

It’s a pretty simple scenario – strong US numbers = USD rally, Weak US numbers = USD sell-off

Note: I am expecting reasonably volatility on the release of the data so don’t go crazy placing pending orders close the market.

What’s Happening with the Majors

Most major currency pairs have good trendlines so there’s going to be some good opportunities if the US data is somewhat variant to expectations.

Euro is still managing to hang onto the 1.12 handle whilst GBP continues to trade in a large volatile range after a tough geopolitical/terrorised week.

The Aussie and Kiwi are drifting and look like they could dip to the downside for a quick stop loss run as ‘commodity’ currencies are sold off with the Oil move.

Whilst the Beast is waiting for the US GDP data to drop. It’s positioned perfectly for a big move… only the data will tell.

Keep an eye on the Japanese CPI data today as it could provide the spark for an Asian move ahead of the US GDP data.

 

USDCAD was the BIG Mover

The only significant move on the day belonged to USDCAD. It rallied 100 points as Oil prices tumbled 5% as the extension of output curbs by OPEC and other producing countries disappointed investors who had hoped for larger cuts, leading to the biggest daily percentage slide in crude prices since early March.

While OPEC’s move Thursday had been expected, some oil market investors had hoped producers would agree to longer or deeper cuts to drain a global glut of crude supplies. OPEC’s move was greeted by a massive sell-off.

The day’s volumes of 1.1 million contracts of WTI were the highest since the Nov. 30 session, when OPEC first announced cuts. The cartel next meets in November.

 

This move in Oil has really put a dampener on our USDCAD NBT placed yesterday. But it wasn’t all bad as the Funds were sitting around our entry level (1.3486) once I had fully completed my analysis and I made the executive decision to cut the trade as I believe USDCAD now has room to rally back towards 1.3600.

I’d rather lock in a 3 point loss then have an annoying 25-30 pip loss that I could have prevented, which would just bug the crap out of me all day.

Our USDYEN order is still active in the market.

It hasn’t been triggered yet and we’ll leave it on right up until the US releases at which point I’ll cancel it and look to trade live.

Important Note: We’ll be updating the ‘Next Best Trade’ when the opportunity arises. Pro Members stay tuned for email updates.

What to Expect from the Market today – Friday 26th May

 

Asian Session:

Keep an eye on the Japanese CPI data … otherwise focus on your trendlines for opportunities. It should be very quiet!

European Session:

It’s the start of the G7 Meeting which will go over the weekend. The G7 is old school and used to be important in the early 90’s. Nowadays it’s a joke and just a huge piss take. Europe will be on hold as they await the US data.

North American Session:

It’s rock n roll as we have both the GDP & Durable Goods data due. You can expect wild moves right on the release but then they should settle down reasonably quickly.

Don’t forget if you’re trading we need both numbers to be the same (strong or weak) for a huge move. If they are as expected or opposite to each other then you won’t see much of a move.

Tune up your charts and get ready to trade.

See you in the Live Trade Zone.

Brad

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