Today’s focus turns to CAD (Oil) & USD

The Donald has inadvertently given the USD a shot in the arm (Dean that means a steroid injection to make it stronger), after he pulled the United States out of an international nuclear deal with Iran, raising the risk of conflict in the Middle East, upsetting European allies and casting uncertainty over global oil supplies (which means higher Oil prices).

Nice one Donald! But at least it was with the current strong USD trend.

The USD though hasn’t gone ballistic. The USD Index slowly climbed to 93.27 (a new high for 2018), before easing off back toward 93.00 in a nice orderly trend pattern.

The CAD though was the ‘whipping boy’ and initially dropped 100 pips (meaning USDCAD rallied) on Iranian officials comments ahead of Trump’s speech as Oil prices dropped from 70.00 to 67.50 before rallying back to 70.70 after Donald ‘s speech.

Very odd though was the lack of correction in the USDCAD as Oil rallied. That may be to do with some crap outcomes for Canada with regards the NAFTA agreement, which at this stage seem to be flying under the radar.

Anyway, if Oil continues to rally then at some stage the CAD will rally (USDCAD will fall) and correct these recent moves.

This brings the JPY back into a potential safe-haven play as Iran and the US draw swords. At this stage, though it’s handbags at 10 paces as Trump suggests more sanctions and Iran says ‘who cares’.

So just be careful running with the safe haven trade just yet.

But our focus and attention should be on Oil prices and that means USDCAD & CAD Crosses. That’s where the action will be for the time being.

Of course, today’s US PPI will be watched closely and the key to the entire week “Thursdays US CPI” is on track to be the main event.

Let’s just hope Trump hasn’t derailed the focus away from these numbers.

In the meantime just remember “The Trend is your Friend”.

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

There are no major data released scheduled in Asia but it hasn’t stopped USDJPY rallying 60 odd points.

I’m not exactly sure what’s going on so like the other media outlets I’ll blame it on Tump.

The Risk On- Risk Off profile doesn’t exactly match up as Asian equities are falling whilst USDJPY rallies But the AUD and NZD are drifting lower which does run by the rule.

It’s tricky and a little murky so I’m concentrating my energy on the JPY crosses for today.

European Session

There’s nothing on the radar so traders will be running with the recent trend or random geopolitical fallout from Trump’s decision to pull the United States out of an international nuclear deal with Iran.

This is bound to ruffle European leaders feathers so stay tuned for erratic announcements that could potentially upset the natural flow of the majors.

North American Session

We’ve got US PPI scheduled today. Now it’s not the big inflation data (that belongs to the CPI) but it is still an inflation indicator, so watch it closely.

Of course, we now have the extra burden of Trump and his geopolitical bandwagon to deal with so just take it easy as the big data (CPI) is tomorrow.

Keep a close eye on Oil & the CAD, because that’s when Trump’s comments will impact first.

Technical Set Up – What’s Happening with the Majors

Today’s Fundamental Drivers

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

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Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!

Brad