Oil Rally Lifts Market Mood; CAD Sees Some Reprieve

After an uninspiring morning, where the absence of Japan and Canada and the publicly observed Columbus Day holiday in US saw most players on the side-lines, a rally in oil prices saw the risk mood lifted, with Wall Street showing modest gains early on. As such, CAD finally saw some reprieve from stop chasers focusing on the 1.3300 levels, above which we see some decent stops through 1.3315-20.

As Russia announced it was willing to partake in an oil production freeze, a move back above $50.0 redressed the early dip, with moves accelerating and pushing through the 2016 highs to record levels above $51.50. USD/CAD was poised to a retest of Friday highs, but has since taken out the lows, tripping stops below 1.3180. Fresh bids met at 1.3150 since, but the risk mood should underpin for now with AUD/USD now testing resistance in the .7625-30 area.

USD/JPY filled the gap left by Asia, opening around 103.25-30, dipping to Friday’s lows, we have seen extended beyond the upper end of the range, but hesitation seen in pushing too aggressively for 104.00 as yet. EUR/USD is also finding buyers again at 1.1150, but sellers are coming in from 1.1200 to keep trade tight here for now. German trade and better than expected Sentix were positives for the single unit, but data having limited influence of late.

For GBP, some much needed respite beginning to show, but the market seems reluctant to push either way too aggressively. 1.2200-1.2500 looks to be containing Cable for now, while EUR/GBP capped by .9100 as yet.

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