Talking Points:
• A drop to six-plus year lows from oil translated into big moves in 'commodity currencies'
• USDCAD in particular drew traders' interests as it cleared a major break to 11-year highs
• The commodity theme will struggle for driving FX trends just as much as risk appetite and monetary policy
See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot.
With key currencies and pairs sidelined by the tension and anticipation of the forthcoming Fed decision and dubious balance in risk trends, traders are looking for another outlet for momentum. A critical technical break from US oil seemed to offer another outlet for fundamental progress. Commodity currencies (CAD, AUD, NZD, RUB, etc) offered a distinct response to the energy market leading natural resource prices lower. Desperate for a fundamental drive capable of providing the productive, swings that have been frozen through sentiment and rate speculation; this seems a fortunate development for the medium-term trader. However, general market conditions stretches further than these fundamentals may be capable of reaching. Ranges are better served in current market conditions, but event risk should define our viable setups. The Fed is a distinct threat a week ahead, a risk resolution is inevitable, but the RBNZ, SNB and BoE decisions are dead ahead. Navigate these markets carefully because activity levels are prone to wild oscillation going forward. We look at the market's risks and opportunities in today's Trading Video.
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