Crude Oil Explodes Higher, CAD and JPY Gain - US Market Open

MARKET DEVELOPMENT – Crude Oil Explodes Higher, CAD and JPY Gain

DailyFX 2019 FX Trading Forecasts

Oil: Crude oil futures saw a record spike higher at the Asia open, with Brent crude gapping higher by 18% to hit 4-month highs following drone attacks on Saudi’s Abqaiq oil facility, which led to over 50% of Saudi Arabia’s oil production being disrupted. As such, focus now turns towards Saudi Arabia’s ability to repair in order to gauge the impact of the supply shock. In typical fashion, oil-sensistive currencies (CAD / NOK / RUB) have been among the best performers thus far, however, much of the initial gains have reserved throughout the European morning.

JPY: Following the elevated geopolitical risks in the Middle East, risk sentiment has taken a knock as global indices trade with modest losses, subsequently, the Japanese Yen is on the front foot to begin the trading week with USD/JPY south of 108.00. That said, with President Trump signalling that they already know who the culprit for the Saudi attacks are and stating that they are locked and loaded, provides further evidence that Middle Eastern tensions are reaching boiling point. Alongside this, with concerns over a global slowdown, surging oil prices raises fears over stagflation risks.

Source: DailyFX

WHAT’S DRIVING MARKETS TODAY

1. “Sterling (GBP) Price Outlook: Brexit, Prorogation and BoE All in The Mix” by Nick Cawley, Market Analyst
2. “Canadian Dollar Price Outlook: USDCAD Reacts to Crude Oil Spike” by Paul Robinson, Currency Strategist
3. “CAD Bullish Positions Double, GBP/USD Shorts Rise, US Dollar Longs Slashed – COT Report” by Justin McQueen, Market Analyst
4. “Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

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