Currencies

• The euro (EUR) advanced around 40 pips and reached at 1.3772 before the retracement back to 1.3707 against the US dollar (USD).  Better than expected German Ifo Business Climate helped the euro to rise higher yesterday. However, there is an expectation that the European Central Bank may add monetary stimulus on next week’s meeting.

• The US dollar (USD) collapsed by dropping more than 140 pips from Friday against the Canadian dollar (CAD). The loonie gained ground against the greenback and formed a new support at 1.1053.

Equities

• The US stocks completed a rally yesterday with the US 500 (SPI) reaching its new record high at 1856. The index advanced as the health care shares climbed.

Commodities

• WTI Crude (OIL) rose up to its five month high at 103.43 US dollars per barrel before dropping back to 102.29. Crude oil declined on speculation that the recent gains were excessive.
  

Mover & Shaker with FX Options

• Gold (XAU) made a rally yesterday and rose more than 20 US dollars. The precious metal reached its four month high at 1338 US dollars an ounce and may look for further upside as demand for gold grows from Chinese investors.

• Options traders may consider constructing a Bull Call Spread on Gold and capture a possible continuation of the rally.

• A Bull Cal spread can be constructed by purchasing an in-the-money Call and selling out-of-the-money Call.