We Live in Interesting Times


AT LEAST - I may not be making money right now but at least it an interesting market out there. What a wacky day that was on Wednesday. In an early weird twist, the ECB delivered a message that it was concerned the market had misinterpreted Draghi's hawkishness from Tuesday, which had resulted in a surge in the Euro to fresh 2017 highs. But the Euro was only bothered for a brief moment, before once again extending its 2017 run, trading towards more meaningful longer-term resistance in the 1.1500 to 1.1700 area.  Interestingly, if you can remember back to March, the ECB did a similar thing when reports surfaced it was displeased with how the market had interpreted its message back then. 

CARNEY'S TURN - But the wackiness didn't stop there. This pattern of central bankers sounding dovish and coming out with a hawkish bias out of nowhere, manifest itself through BOE Governor Carney, who took his turn at talking much more hawkish than he had done in previous appearances. Of course, the Pound could not ignore the comments, with the UK currency racing to its own multi-session highs into the 1.2900s. But at this point, with the Euro coming into major resistance and the Pound still fraught with uncertainty relating to Brexit, one can only wonder how much more there is in this run before these currencies finally relent. 

LOONY LOONIE - And it would be unfair to talk about Wednesday price action without highlighting the star of the day, with the Canadian Dollar extending its run and leading the charge, getting its own fuel from the out of nowhere bout of central banker hawkishness, in the form of Bank of Canada Governor Poloz remarks. And adding even more demand for the commodity currency was another impressive rally in the price of OIL, something that has been a rarer sight these days, with OIL having a much harder time in 2017. 

Central bankers everywhere are infected with the hawkish fever. Via @joelkruger

TRADING - On the strategy side, I was able to catch a nice entry in GBPUSD, selling the high of the day, but into the Wednesday close, the follow through was mild and the stop was already moved to cost to eliminate risk. USDCAD is also looking attractive to me now and there's a chance I will be looking to trade this one in the hours ahead. I'm less confident in OIL's ability to put in a sustainable rally and even less confident this run in the Loonie will be able to hold up amidst a swirl of global uncertainty that should start to once again weigh on the correlated Canadian Dollar. Finally, AUDNZD has pushed back up and is showing promise. But ultimately with this one, I'd like to see a break through 1.0550 for legitimate momentum. 


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