The greenback is suffering today, slumping to a one-month low as stocks surge back to reclaim the June highs. Hopes for Moderna’s vaccine are elevated, while Goldman Sachs smashed top and bottom-line expectations for its earnings, posting the second highest revenue in history on blockbuster fixed income trading revenues. Moreover, overall trading income almost doubled in Q2 from a year ago. This begs the question – is Wall Street benefitting from all the policy stimulus more than Main Street?
On top of this earnings optimism, it is also hard to imagine a better string of US manufacturing data released this afternoon. Industrial output rose 5.4% m/m, the largest monthly gain in almost 75 years, and other manufacturing data also jumped, beating analyst expectations.
The Bank of Canada meeting has yielded few surprises so far with Governor Macklem, in his first official meeting, holding rates at 0.25% as expected and stressing that policy accommodation will remain in place for some time. The economy remains in a hole even though data has produced some positive surprises recently.
Loonie languishing encore
CAD is reverting to type again by lagging its commodity peers on the day and in fact on the month. Markets await the BoC press conference in less than hours’ time and focus will be on the tone of Governor Macklem and Deputy Wilkins.
The trendline from the March highs looks to be holding down USD/CAD at the moment, with the 50-day Moving Average just above and acting as additional resistance. This points to limited upside at present with prices drifting lower towards 1.35 and below.
1.14 needs to hold in EUR/USD
The Euro has extended its climb past the recent cycle high at 1.1422 with its fourth consecutive day of gains. Hopes are high for significant progress on the recovery package to be discussed this weekend at the EU meeting.
There is little resistance ahead of the year-to-date highs at 1.1495, with chances of a solid technical breakout from the recent June consolidation rising ever higher, if prices close strongly above 1.14.
MyFxtops 邁投 (www.myfxtops.com) -Reliable Forex Copy Trade community, follow the master for free to trade!
Disclaimer: This article is reproduced from the Internet. If there is any infringement, please contact us to delete it immediately. In addition: This article only represents the personal opinion of the author and has nothing to do with Mato Finance The originality and the text and content stated in this article have not been confirmed by this site. The authenticity, completeness and timeliness of this article and all or part of the content and text are not guaranteed or promised. Please refer to it for reference only Verify the content yourself.
Copyright belongs to the author.
For commercial reprints, please contact the author for authorization. For non-commercial reprints, please indicate the source.
