FX Took Center Stage as Dollar Past 91 Mark

STATE OF THE MARKETS

Investors see more FX play as Dollar index fell below 91 mark. Global equities that struggled to find direction earlier, finally closed higher as vaccine optimism continue to lead markets when the UK became the first nation to authorize the emergency use of vaccine developed by Pfizer and BioNTech. The shot was also reviewed by US FDA and authorization could come later this month for before end of year rollout. US 10Y yield climbed higher to around 0.966% before settled at 0.938% as bond markets closed.

Decline in US crude inventories sent crude oil higher to closed above $45/barrel and talks that OPEC+ would extend the cut through new year, sent oil traders biding the black gold up. Nevertheless, investors remain cautious with gold seen bidding up to $1,832/oz before closed around $1,829/oz.

In the FX space, the greenback was bid lower, past the 91 mark though offers were well absorbed as sentiments in the short to medium term for Dollar improves. Swiss and Aussie took the lead from Euro in the short term while medium and long term remain relatively unchanged. Sterling lost traction when doubt about Brexit deal returns, but remain in demand for the long term as more than $500M worth of block orders were traded in the futures market.

G8 CURRENCIES SENTIMENTS

** ST refers to Short-Term which is daily turnover, MT is Medium Term which is 
weekly and LT refers to Long-Term which is monthly turnover.

WALL ST MOST ACTIVE

** % Change here refer to price vs previous day price

WALL ST TOP FLOWS

** % change here refers to volume vs. 20 days average volume.

TOP 5 BLOCK ORDERS

OUR PICK – GBP/JPY

Block orders signal Sterling support. Today’s block orders worth more than $500m in Sterling futures gave us conviction that the Queen’s currency will remain supported above ¥138.80 – the weekly pivot. There is convergence in 8 and 21 days VPOC at around ¥139.39 while 5 days VPOC is around ¥139.23. Though recent Brexit talks seemed to downplay the deal before year end, sentiments in the medium and long term still support this trade. Reverse sentiment in the short term might just be a pullback on profit taking from day traders.

Disclaimer:

This article is for general information purpose only. It is not an investment advice or a solicitation to buy or sell any securities. Opinions expressed are of the authors and not necessarily of MFM Securities Limited or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.