US AM Digest: CAD Softer on Possible OPEC Oil Production Increase
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- Russian and Saudi Energy Ministers say possible production increases may be announced in June
- Spanish Opposition put forward vote of no-confidence against PM Rajoy, PM rules out snap election
USD: US Dollar moving within close proximity towards the December high of 94.22 having reached an intra-day high of 94.17 this morning. Weakness in major pairs, EUR and CAD contributing to lift the greenback above 94 this morning. Durable goods broadly mixed across the board and as such, unlikely to derail the US Dollar which looks intent on breaching the December high.
CAD: The Canadian Dollar is the underperformer in the G10 space today following the declines seen in crude oil prices. This comes after confirmation by the Saudi and Russian oil minister that they are looking at potential easing supply cuts by OPEC in order to make up for the lost capacity of Venezuela and Iran, with production possibly rising by as much as 1mln bpd. USDCAD pushing to 2 weeks highs, levels on the upside is the 1.30 handle, which could offer resistance.
EUR: Another political issue arising in the Eurozone, and no its not Italy, but Spain. Reports this morning from the Spanish opposition (Podemos and the Socialists) parties stated that they have put forward a motion of no confidence against PM Rajoy. In response to this, PM Rajoy had ruled out a snap election on the basis that it conflicts with the Spanish economic recovery. Subsequently, the Euro has been pressured with EURUSD making a breach through 1.17.
DailyFX Economic Calendar: Friday, May 25, 2018 – North American Releases
IG Client Sentiment Index: US OIL Chart of the Day
Oil - US Crude: Retail trader data shows 50.1% of traders are net-long with the ratio of traders long to short at 1.0 to 1. The percentage of traders net-long is now its highest since Apr 03 when it traded near 6328.5. The number of traders net-long is 10.9% higher than yesterday and 14.7% higher from last week, while the number of traders net-short is 7.3% lower than yesterday and 9.4% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil - US Crude prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil - US Crude-bearish contrarian trading bias.
Four Things Traders are Reading
- “CHF Has Scope to Rise Amid Risk of Potential Short Squeeze” by Justin McQueen, Market Analyst
- “Brent Crude: Prices Fall on Demand Moderation Talk” by Nick Cawley, Market Analyst
- “GBPUSD Consolidating After Tepid Q1 UK Growth Confirmed”by Nick Cawley, Market Analyst
- “EURUSD Weakness Continues as Italian Yields Spell Danger” by Nick Cawley, Market Analyst
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--- Written by Justin McQueen, Market Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.