European Open USDCAD Rallies from Trend Support
The Us dollar held onto yesterday’s gains overnight, and USD/CAD was yesterday’s strongest major which could bode well if the greenback extends its lead today.
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European Indices headed higher on Tuesday with only shadows of the normal hustle and bustle of the city of London returned in the midst of consecutive four day weekends. The amount of trading activity seen has been particularly quiet, as one might expect from the short week ahead of us, but there are also a few factors to consider that is also keeping trading activity low such as tomorrows Fed decision and Barclays earnings.
Much of the reduced activity we have seen so far has been focused on the tech sector, with chip maker ARM Holdings continuing to see buyer demand, this time triggered by a positive note and upgrade in price target from Citigroup. The firm’s shares have rallied near 2% on the back of this.
Similarly good gains for energy firms has also kept European Indices afloat, counter balancing weakness in financial and mining shares. There is a degree of anticipation towards Barclays earnings, which are announced tomorrow, that is keeping traders from adding to existing positions within the main banks. A drop in copper prices and gold, with the latter falling from record highs of $1518, has also convinced traders to take profits in the mining sector having seen the sector rally some 6% from last Monday’s lows.
Heritage Oil shares have seen bullish buying activity this morning with investors triggered into action after the oil firm announced a $100m share buyback. Shares have been pushed higher by 7% this morning.
We have the FOMC starting their two day meeting later today and the market is eagerly awaiting any indication of future monetary policy direction and any change in stance from the committee’s current accommodative stance. This factor is also likely to refrain traders from staking large positions ahead of tomorrow’s announcement.
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