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•Overnight market action has been dominated by a risk-off tone as stocks in Asia and Europe tumbled and North American issues are set to follow suit
•The safe haven Japanese Yen has risen substantially as a result and is up almost 1% against the USD and over 1.5% against the British Pound
•Sterling is suffering as next week’s UK referendum on EU membership approaches with no clear path for either side
•That uncertainty is being cited as the spark for today’s sell off in equities which has also coincided with a 1% drop in oil prices
•WTI is now trading below $49 a barrel from a high of $51.67 last week – a precipitous 6.7% decline since Thursday…
•…and the Loonie has dropped alongside it despite a rather upbeat employment report Friday morning
•USDCAD is threatening to break above the 1.2800 mark for cumulative gains of 1.2% for the greenback since Friday’s post jobs low in the mid 1.2600’s
•There are no data from the U.S or Canada today but it is a very busy week ahead…
•…highlights include Tuesday’s U.S Retail Sales, Wednesday’s Fed meeting, and inflation data from the U.S and Canada on Thursday and Friday respectively
USDCAD Technical Glance
USDCAD is testing key areas of resistance this morning that if broken could see the USD rise further. The six day high reached overnight on weak oil prices brings into focus the 21 day moving average at 1.2956 as the next important level to watch. On a daily basis, the relative strength index is pointing to potentially oversold conditions for the USD as it hovers near the 30 level, and this may attract further USD buyers.
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