Market Directions Of Major Pairs

Market Directions:

1) Most Asian Equities Track Stronger Wall St Higher, Shanghai Lags

2) Slowing Canada Consumer Price Index (CPI) to Curb USD/CAD Weakness

3) Japanese Yen Gains, Nikkei Slips On Report Of Trump Team Subpoena

4) Crude Oil Drops On Inventory Build, OPEC Plans but Trend May Continue

>1) Most Asian Equities Track Stronger Wall St Higher, Shanghai Lags

US tax reform remained very much in focus. House Republicans passed a bill Thursday to cut what both businesses and individuals pay, the biggest step yet in plans to reform the system. However a similar bill must still pass the Senate, which may prove trickier given the electoral math. The Nikkei was hit earlier by a report saying that Donald Trump’s election team had received a subpoena requesting documents from the special investigative team looking in to possible collusion with Russia. However the index seemed to have bounced back from this into the close.

The Japanese index ended up 0.2% with stocks also higher in Sydney, Hong Kong and Seoul. The Shanghai Composite again bucked the trend and looks set to end lower on the day.

There wasn’t a lot of action in the Asia-Pacific foreign exchange space as a lack of data weighed. The Yen got a modest boost as that US subpoena story hit risk appetite, and the US Dollar was generally a little weaker through the session.

>2) Slowing Canada Consumer Price Index (CPI) to Curb USD/CAD Weakness

Canada’s Consumer Price Index (CPI) is anticipated to slow down for the first time since June, and signs of easing price pressures may generate a near-term rebound in USD/CAD as it encourages the Bank of Canada (BoC) to carry a wait-and-see approach into 2018.

Keep in mind, the BoC appears to be on course to further normalize monetary policy next year as the central bank notes ‘less monetary policy stimulus will likely be required over time,’ but Governor Stephen Poloz and Co. may stick to the sidelines at the last-2017 meeting on December 6 as ‘wage and other data indicate that there is still slack in the labour market.’ With that said, USD/CAD remains at risk for a larger correction as the BoC tames expectations for an imminent rate hike, and the dollar-loonie exchange rate may continue to recoup the losses from earlier this as long as price and the Relative Strength Index (RSI) preserve the bullish formations carried over from September.

However, and unexpected pickup in the headline reading for inflation may trigger a bullish reaction in the Canadian dollar as it puts pressure on the BoC to raise the benchmark interest rate sooner rather than later, and USD/CAD may exhibit a more bearish behavior over the coming months as ‘the Bank estimates that the economy is operating close to its potential.’

Canada’s Consumer Price Index (CPI) picked up in September, with the headline reading climbing to an annualized 1.6% from 1.4% in August. A deeper look at the report showed energy costs increasing another 2.7% in September to lead the advance, with Transportation costs also rising 1.1%, while food prices narrowed another 0.8% after slipping 0.3% the month prior.

>3) Japanese Yen Gains, Nikkei Slips On Report Of Trump Team Subpoena

The Japanese Yen made gains on the US Dollar Friday, while the Nikkei 225 slipped, on a report that the first subpoena against the election campaign of US President Donald Trump had been issued pursuant to investigations of alleged collusion with Russia.

Special Counsel Robert Mueller’s team has ordered documents, according to a Wall Street Journal report citing a source familiar with the matter. The source also told the Journal that Trump’s campaign was surprised by the movehaving offered what it called full, voluntary cooperation with previous requests.

Although this is the first time that Trump’s campaign has been ordered to turn over information, a subpoena was previously served on his former campaign manager Paul Manafort and some associates. Manafort has already been charged with multiple counts. It was also announced in October that former Trump campaign advisor George Papadopoulos has pleaded guilty to lying to the Federal Bureau of Investigation about contacts with Russian officials.

Still, this latest clear sign that the investigation into Trump’s campaign isn’t going away anytime soon knocked risk appetite in Asia. The Nikkei 225 shed over 300 points after the news broke, with little obvious other reason for the slide. USD/JPY fell to 112.39 from around 113.00 before the story.

The Japanese Yen is perceived as a haven currency in times of market stress and seems to have fulfilled this role on Friday. USD/JPY was already retracing from recent peaks, a process now apparently accelerating. The pair needed to hold on around the 113.00 level to prevent a bearish “head and shoulders” pattern from appearing on the chart. Now that that level has given way, that pattern appears to be holding.

>4) Crude Oil Drops On Inventory Build, OPEC Plans but Trend May Continue

The price of Crude Oil is off the highest prices of the month as investors digest a recent EIA report showing the first build in crude and crude products in two months and as they await clarity on OPEC+ (a moniker for OPEC and strategic alliances like Russia.) Traders should note the finish to the year has been kind to Crude recently, and the charts are suggesting we could see a similar rally, but traders may have to put up with the volatility that proves directionless until the Nov. 30 meeting of OPEC and allies has passed.

From a broader perspective, the recent 28-month high in crude oil last week, which was boosted by geopolitical tensions in the Middle East between Saudi Arabia that have led to a presence in Lebanon as warnings by the Saudi Royal court against Iran have escalated. Another key piece of industry news that provided price volatility, but may prove directionless in the end, is that Norway’s global leading sovereign wealth fund with $1 trillion in assets has proposed shedding their energy-intensive oil and gas stock portfolio. Their energy exposure is worth by nearly $35 billion, and this move would be to reduce concentration risk should an adverse energy price shock happen again. Another concern over the week came when the IEA reduced their demand forecast and said that $60

From current pricing, a hold of a daily close above the $54 figure (highest close in February) opens the door for a challenge of $52.83-53.94/bbl (September high, 100% Fib extension). Alternatively, a reversal and close back below $50.18 exposes $49.13 (October low, trend line pivot). A hold above support could keep price pushing to the top of the price channel or extend to the 1.618% Fib extension of the Aug-Sep. extremes to $59.08

This is learning where market move not for recommendation buy or sell