Maanshaft out, EURUSD down, Dollar up and Trump toned down.

Yesterday, I highlighted that USD was bid during the North American session and was offered in the Asian session. That is still the case today.

USDJPY is trading around 110. It is below it is daily pivot (110.12) and I see it hitting at least the first resistance at 109.80.

Today, I had the pleasure of shorting EUR and it was a great trade. EURUSD had a 100+ pip range and downside targets were all hit. It seemed at one point all traders were watching the Germany game and no one was buying EUR. In any case, this was a great day to short it and there were a lot of expiries (Put @ 1.1620 and 1.16) during the 10 am cut off that made it offered all day as NY session got underway.

I suspect we might see a quick bounce back to the pivot at 1.1580s and then a retest of the recent lows at 1.1510. From there, a break will take us further down to 1.1450 then low 1.13s.

USDCAD was bid big time as the market interpreted Poloz remark following his 3 pm speech. It went bid up to 1.3385. Someone was buying at the highs but good offers were still lurking there. At one point, Reuters headlines mentioned Poloz saying the market had interpreted the May meeting quite well. I found myself trying to remember what came out of the May meeting. All I could think of is swaps pricing in a July hike. Yet USDCAD kept getting bid so I went with it keeping in my mind the resistance at 1.3380 and the fact that that comment was hawkish. And when my target was reached, I started shorting as it came down from 1.3385 to 1.3355 taking 24 pips of profit. It bounced back to 1.3370 and I shorted again as Poloz made it more clear to the market, rates should be higher.

1.3320 seems to be a buy the dip level but a break of that level means this thing is exhausted. Will keep watching as I closed all positions for a very profitable day.

Sincerely,

 

The Flow Trader.