Euro and CAD suffer on Memorial Day

The US and UK are on holidays but I am certainly not.

I realize trading is thin but there are still opportunities in USDCAD (oil down) and EURUSD (Italy woes).

USD was bid overall and DXY hit 94.46. I did think last week that 94 will be a strong resistance but the EUR weakness due to the Italian government negotiations made me mindful that 94 could easily break.

I was short EUR on a break below 1.17 overnight. The euro was bid Sunday afternoon after the President blocked Savona from the finance minister post. I was looking to fade the move as it did not mean to me that the Italian situation was improving. As the market realized this will raise questions about new elections, eventually Italian bonds got wrecked – nonetheless, I feel we are in experiencing the last leg of the move.

$EURUSD: I covered at the R1 for the day at 1.1615 and flipped small long at 1.1610. Tough to hold this position so I just closed it at 1.1628 for 18 pips after taking 85 pips overnight. I do like to go countertrend at daily levels but usually, these are smaller positions if the main trend is alive. Essentially, these are stressful positions to hold. I take a small gain and move on.

$USDCAD: I just went short USDCAD at 1.3015 here but CAD is really weak and I am down 3 pips:). I just think commercial hedgers like to lock in prices at these levels. 1.3050 then 1.31 are the next levels to watch. If I sense oil could reverse and overall risk sentiment improves, I might add to my USDCAD short but I will be very patient as overall CAD weakness look poised to continue.

Happy Memorial Day and Good luck trading!