The surge of positivity that came with economies beginning to re-open is now being replaced with caution and doubt as infection rates are picking up.
News that even as New York is set to further reduce its lockdown restrictions, infection rates in some US states are sharply picking up again. Consumer products giant, Apple, closing some of its stores again in Florida and Arizona suggests that the surge in retail sales seen in May could simply be a knee-jerk reaction rather than a full swing of economic recovery for the US. The result is a mixed look to major markets today. Recent sessions have seen a drift of dollar strengthening as previous weakness is being retraced.
Although the early moves are looking slightly dollar negative, the trend over the past week has been for the dollar bulls to come out in favour as the session develops. Equities have been distinctly cautious (US dollar gaining ground tends to come hand in hand with risk aversion still) and indices are cautiously lower in early moves. Even though Treasury yields are showing little real direction of late, there has been a swing back into gold once more. This could certainly be born of a safe haven flow, but there is key resistance between $1744/$1764 which has restrained the price on several occasions in the past couple of months.
USDCAD focus remains towards the month open at 1.3775. Price is trading around the noted 1.3611 in early week trading. Generally speaking, the 6/17 high at 1.3595 probably needs to hold in order to trade from the long side.
6/17 – Is a flat also complete in USDCAD? If so, then price is headed
towards 1.3775 (month open) while remaining above 1.3505. There is a high volume level at 1.3611. I need strength above that level in order to be long.