Loonie Rises as Bruised Trudeau Prepares to Form Minority Government 22/10/19

Asian stocks rose in early trading as the market remained upbeat about corporate earnings and hopes of a Brexit deal. This week, the market will receive quarterly results from more than a hundred S&P500 stocks like Boeing, McDonalds, Chipotle, and Microsoft. The results released so far have been promising, especially at a time when the market is worried about a slowing economy. Meanwhile, WeWork continues to struggle. According to Wall Street Journal, the company could be valued at just $8 billion in the latest round of funding. This is much lower than the $47 billion it was valued at a month ago.

Australian dollar. The Australian dollar remained at elevated levels against the USD. This is a day after the People’s Bank of China (PBOC) surprised the market by leaving rates unchanged at 6.2%. This was the first time the bank has not tweaked rates since August. The decision signals that the country is keen to avoid overly loosening the monetary policy. It could also be a stamp of confidence, especially after the country reached a partial deal with the United States. A poll of economists by Reuters had priced-in another rate cut. The Aussie is often seen as a proxy for China’s developments because of the volume of goods that it takes to China.

AUD/USD. At the time of writing, the AUD/USD pair is trading at 0.6885, which is slightly below yesterday’s high of 0.6880. On the hourly chart, the momentum indicator has moved below 100 while the pair is along the 14-day and 28-day moving averages. The Average True Range (ATR) has declined sharply, which is a signal of low volatility. Today, the pair may remain along these levels ahead of the existing home sales data from the US.

Loonie Rises as Bruised Trudeau Prepares to Form Minority Government 22/10/19, FP Markets

Canadian dollar. The loonie continued to rise against the USD as the country’s voters went to the polls. Results showed that Justin Trudeau’s party won the election. Still, the prime minister has lost the wider support that he received in the previous polls. He will now be forced to form a coalition as he leads a minority government. In recent months, Trudeau has been forced to defend himself after a series of scandals. Later today, Canada is expected to release its retail sales data for August. These numbers are expected to show that retail sales rose by 0.5%, which is slightly higher than July’s 0.4%. Core retail sales are expected to rise by 0.1%.

EUR/CAD. The EUR/CAD pair remained closer to the lowest level since October 16. On the hourly chart, the pair is trading at 1.4588, which is slightly above yesterday’s low of 1.4580. It is slightly below the 38.2% Fibonacci Retracement level. This price is slightly below the 14-day and 28-day moving averages. The RSI has moved slightly above the oversold level of 30. The pair may continue moving lower after Trudeau’s victory.

Loonie Rises as Bruised Trudeau Prepares to Form Minority Government 22/10/19, FP Markets

Sterling. Sterling remained close to the highest level since May this year. This happened as the market continues to be optimistic that Boris Johnson’s exit proposal will have modest support in parliament. Data shows that the deal could get approved by 320 members of parliament. Over the weekend, Johnson was forced to request a delay to Brexit by sending a letter to the European Union. Yesterday, Speaker John Bercow rejected Johnson’s plan of holding a “meaningful vote.” He said that this would have been repetitive and disorderly.

EUR/GBP. The EUR/GBP pair remains close to the lowest level since May this year. As of writing, the pair is trading at 0.8590. On the daily chart, this price is along the lower line of the Bollinger Bands. It is also below the 14-day and 28-day moving averages while the RSI has moved to below the oversold level. The Chaikin oscillator is at the lowest level since January this year. While the pair may continue moving lower, there is also a possibility that it will be more volatile as the Brexit situation unfolds.

Loonie Rises as Bruised Trudeau Prepares to Form Minority Government 22/10/19, FP Markets

Start Trading
in Minutes

bullet Access 10,000+ financial instruments
bullet Auto open & close positions
bullet News & economic calendar
bullet Technical indicators & charts
bullet Many more tools included

By supplying your email you agree to FP Markets privacy policy and receive future marketing materials from FP Markets. You can unsubscribe at any time.

Source - database | Page ID - 22557

Get instant Updates in Telegram