Rapid Oil Price Recovery

Morning Report: 06.30 London

• Oil prices staged a remarkable recovery yesterday, helped by a ‘risk rally’ that lifted the yen pairs higher.

• The AUD/JPY saw the largest gains as a general commodity rebound helped lift the China dependent Aussie.

• Another commodity currency pair, the Canadian dollar enjoyed a similar reversal, pushing the USD/CAD lower.

• The pound performed well, with the GBP/JPY rebounding sharply and the EUR/GBP continuing to decline as the euro under performs.

• Meanwhile, the US dollar continues its slow but steady descent.

Coming up today:

• Coming up today we have German ZEW economic sentiment, released alongside European-wide data at 10.00.

• This is followed by US building permits at 13.30.

• We then have a series of central bank speeches starting with RBA Governor Stevens at 14.30, then BOE Governor Carney at 15.35, followed by BOC Governor Poloz at 16.00.

Trade Idea:

• The oil price slump on Monday has been turned over as quick as it arrived.

• This bodes well for the USD/CAD which was already showing some impressive momentum.

                     

A good way to play this is a LOWER trade predicting that the USD/CAD closes below 1.2700 in 10 days time for a potential return of 120%.

                          
                                                         

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