Entered CAD/CHF on as price tested the high of the Asian session. Fundamentally CAD is stronger the CHF and CADCHF has got battered lately on the daily chart. I expect price to churn around some here in the price area before potentially moving higher on the 4hr daily. This trade will probably be an intraday trade but I will ride it to see where the momentum goes.
CAD should be supported by projections for $100/barrel oil and hawkish outlook.
JPY acts as safe haven so it has be driven up over risk off, but JPY central bank is still dovish and announcing no plans to change in near future.
Ultimately as we begin to (or when) we begin to move to risk again, this is a potential area to look for a long.
USD safe haven tendency along with a hawkish outlook could help dollar do well in the current risk off mood of the market.
JPY continue to be dovish recently making announcements confirming no plan to tighten policy creating a divergence. Where as JPY acts a safe haven, the USD safe haven + hawkishness could outweigh this and move towards forecasts of 115.75
NZD Central Bank is very Hawkish while JPY has no plans of even considering policy tightening. That said, there is currently some mild Risk Off due to covid, rushia, and supply chain issues acting as a headwind to a long position in this pair.
i would like to see a deeper pullback before looking for entry triggers.
NZD Continues to be hawkish and EUR dovish creating a divergence, however, with the recent risk off sentiment due to covid, rushia, and supply chains NZD is doing some sell off so this could pull back further...caution is advised on timing.
NZD stil has strong GDP and Rates. CHF is struggling with trade to EUR one of it's primary trade partners weighing on GDP and Rates. This should cause a divergence and upward pressure. However, Risk Off can be a headwind. Bank Forecasts remain higher to 0.62.
Oil is projected to hit $100/barrel and this will help drag CAD up. EUR seems to have no hawkish plans despite increase in CPI, where as CAD is very hawkish with a expected 'surprise rate hike'
CAD should be taken higher by projections for $100/barrel and on the recovery story along with hawkish talk from CAD Bank. In contrast CHF diverges with continued dovish outlook and european trade headwinds.
Summary of Analysis
The Bank of Switzerland has been very vocal they plan to keep a very accommodating stance and seems like they will be one of the last countries to begin raising rates. This should see EUR/CHF strengthen, however, due exchange rates in EUR/USD it may be a slow grind up. This however, should provide some stability at current prices in EUR/CHF...
Possible Short USDCHF.
CHF and USD are both Neutral to Weak. Given this information, I expect that USDCHF will not make any power moves today. The last three days USDCHF has been trading in the .90600 to .90200 area. A short around the .90600 area has a good chance to see lower prices. The trade would be closed by end of US Session.
NOTE: Below are charts...
Possible important market decision to whether or not to hold 2008 line on USDCAD. Whatever the out come looking for the other pair to fall in line. USDCAD had skirted around this level from some time now.
GBPUSD and AUDUSD at major support (blue area) since Brexit vote. The pair has a high daily correlation. Looking for a trend up in the 2 or 1 hour charts in AUDUSD that is confirmed by GBPUSD not moving lower.
EURUSD is hovering in long term support zone (blue box). EURJPY has a high correlation to this pair and has made a small break to the short term trend. Monday will be looking for EURUSD to confirm an uptrend in the hourly chart while watching the EURJPY as a possible alert to additional down moves.
