Oil prices plunge 30% last night after Saudis start price war with Russia.
Erik Bregar of Exchange Bank of Canada - InsideFutures.com - Tue Mar 10, 1:28PM CDT

ANALYSIS

USDCAD

Global markets are a sea of red thismorningfollowing the shocking weekend news that Saudi Arabia effectively started a price war with Russia in response to OPEC+ talks breaking down last week. The news broke on Saturday and led to a tumultuous open for most markets last night. April crude oil futures gapped down more than 30%, the S&P futures plunged 5% lower and went quickly locked-limit down and USDCAD exploded 100pts higher right out of the gates. US yields collapsed below 0.5%, USDJPY cratered 300pts and the Australian dollar flashed crashed over 4% at one point. USDCAD spiked as high as 1.3765 on the AUD flash crash, and while it has since pulled back a bit on the AUD bounce back to break-even, its still trading over 100pts higher from Fridays close. Everybody is now watching the US stock market, which is managing to bounce 1.5% off its lows, but this comes after the S&Pgapped7% lower at the open and got halted for 15 minutes due to the automatic triggering of trading circuit breakers. The Fed Funds futures curve priced in 100% chance ofin an emergency 125bp rate cut to zero at the worse of it all...they now see 100% of just 100bp in cuts.

With USDCAD moving into uncharted territory now on the daily chart, were forced to look at intra-day patterns exclusively and hints from chart technicals in other markets. We see the pivotal range for USDCAD today being the 1.3610s-1.3690s. A move back above this range could create enough positive momentum for yet new swing highs, whereas a move below it could bring about some profit taking from traders who have stuck with the markets uptrend since late January.

USDCAD DAILY

USDCAD DAILY

USDCAD HOURLY

USDCAD HOURLY

APR CRUDE OIL DAILY

APR CRUDE OIL DAILY


EURUSD

Euro/dollar is surging 1.5% higher this morning as the market continues to benefit from broad risk-off flows, but this time its coming from todays oil market crash and a frantic rush to price in a 100bp emergency rate cut from the Fed. The market blew past trend-line extension resistance in the 1.1380s during the AUD flash crash last night and touched weekly resistance in the 1.1460-90s during this move. Sellers have emerged three times since hitting these levels in overnight trade, which is making us wonder if the market is finally getting tired of going up.

EURUSD DAILY

EURUSD DAILY

EURUSD HOURLY

EURUSD HOURLY

APRIL GOLD DAILY

APRIL GOLD DAILY


GBPUSD

Sterling continues to benefit from the relative;y less dovishUK vs US monetary policy trade. While the OIS markets have now priced in a 100% chance that the Bank of England cuts rates by 50bp on March 26th, the Fed Funds markets are now pricing in 100% chance that the Fed cuts 100bp to zero on March 18th. Chart resistance in the 1.3180s have since capped prices in the overnight session though and were now seeing GBPUSD slip below the 1.3120s, which is mildly bearish on an intra-day basis.

GBPUSD DAILY

GBPUSD DAILY

GBPUSD HOURLY

GBPUSD HOURLY

EURGBP DAILY

EURGBP DAILY


AUDUSD

The Australian dollar flash crashed 4% lower going into 10pmET last night, sending already panicked global markets into a tailspin after the oil markets plunged 30% lower at the 6pmET open. We heard rumors that some funds were forced to liquidate long AUD positions due to margin calls. The selling could have also come from a large player trying to take advantage of the unusual AUD outperformance at the start of Asian trade and the Aussie'srelative ill-liquidnature vis a vis EUR and JPY. The market has roared back since however, proving the flash crash theory, and were now looking at an AUDUSD daily chart they could amazingly record a bullish reversal.

AUDUSD DAILY

AUDUSD HOURLY

AUDUSD HOURLY

USDCNH DAILY

USDCNH DAILY


USDJPY

Dollar/yen got absolutely hammered in the overnight session after the US 10yr yield resumed its plunge lower, but its trying to regain chart support in the 102.30s now following a 1.5% bounce in the US stock market. The bounce in stocks came after the US exchanges halted trading for 15 minutes due to the 7%-down circuit breaker being triggered. US yields are bouncing mildly too. Still nothing yet from the Fed however in terms of an emergency rate cut, but implied Fed funds for March 18thhave up-ticked back to 0.21% after being at zero.

USDJPY DAILY

USDJPY DAILY

USDJPY HOURLY

USDJPY HOURLY

US 10YR BOND YIELD DAILY

US 10YR BOND YIELD DAILY

Charts: Reuters Eikon

Interested in creating a custom foreign exchange trading plan?Contact usor call EBC's trading desk directly at1-888-729-9716.

About Exchange Bank of Canada
Exchange Bank of Canada, EBC Canadas Foreign Exchange Bank, is the only Schedule 1 Canadian bank specializing in foreign currency exchange and international payments for financial institutions and corporations. EBC provides innovative foreign exchange management and integrated international payment solutions tailored to meet business needs on a global scale. Leveraging industry leading technology and a client-focused team of experts EBC delivers comprehensive, cost-effective and trusted payment processes and foreign exchange currency solutions to create financial and operational efficiencies. To learn more, visit:www.ebcfx.com.

Disclaimer:All product names, logos, and brands are property of their respective owners. All company, product and service names used in this website are for identification purposes only. Use of these names, logos, and brands does not imply endorsement.
This publication has been prepared by Exchange Bank of Canada for informational and marketing purposes only. Opinions, estimates and projections contained herein are our own as of the date hereof and are subject to change without notice. The information and opinions contained herein have been compiled or arrived at from sources believed reliable, but no representation or warranty, express or implied, is made as to their accuracy or completeness and neither the information nor the forecast shall be taken as a representation for which Exchange Bank of Canada, its affiliates or any of their employees incur any responsibility. Neither Exchange Bank of Canada nor its affiliates accept any liability whatsoever for any loss arising from any use of this information. This publication is not, and is not constructed as, an offer to sell or solicitation of any offer to buy any of the currencies referred to herein, nor shall this publication be construed as an opinion as to whether you should enter into any swap or trading strategy involving a swap or any other transaction. The general transaction, financial, educational and market information contained herein is not intended to be, and does not constitute, a recommendation of a swap or trading strategy involving a swap within the meaning of U.S. Commodity Futures Trading Commission Regulation 23.434 and Appendix A thereto. This material is not intended to be individually tailored to your needs or characteristics and should not be viewed as a "call to action" or suggestion that you enter into a swap or trading strategy involving a swap or any other transaction. You should note that the manner in which you implement any of the strategies set out in this publication may expose you to significant risk and you should carefully consider your ability to bear such risks through consultation with your own independent financial, legal, accounting, tax and other professional advisors. All Exchange Bank of Canada products and services are subject to the terms of applicable agreements and local regulations. This publication and all information, opinions and conclusions contained in it are protected by copyright. This information may not be reproduced in whole or in part, or referred to in any manner whatsoever nor may the information, opinions and conclusions contained in it be referred to without the prior express written consent of Exchange Bank of Canada.