Article / 08 June 2016 at 23:44 GMT

US Market Wrap: Same old story as USD sinks and oil rallies

FX Trade Strategist /


  • Japan:  Foreign Investment, Machinery Orders                               2350 GMT                                                                                      
US Data released:

  • Job Opening and Labor Turnover Survey (JOLTS) for April. (Actual 5.788 v forecast 5.672)
  • EIA Crude Oil Stocks change (Actual -3.226 m/b v forecast -2.740 m/b)

By Michael O'Neill

It wasn’t a particularly good day for the US dollar. In fact, it was downright nasty. The only major currency that it gained against was sterling and that was all due to Brexit jockeying.

EURUSD opened up with a bit of a bid tone and it climbed steadily until mid-morning when it touched 1.1409.

From there, it slid back to 1.1390 where it ended the day. Perhaps Janet Yellen’s reportedly favourite labour indicator had something to do with it. While JOLTS showed a record number of job openings there was an inexplicable decline in hiring.

The commodity currency bloc had a good day, led by Kiwi. NZDUSD drifted higher throughout the session and then spiked to 0.7114 from 0.7018 when the Reserve Bank of New Zealand left rates unchanged. That was the preferred outcome.

The big story of the day was the rally in crude oil. West Texas Intermediate touched $51.31/barrel by mid-morning and retreated after a somewhat mixed EIA report.

Initially traders took a tiny increase in US production as more important than the larger than expected drawdown. Prices spiked to $51.61/b near the close.

 It wasn't the day of the dollar, but crude oil is showing strength over $50/b. Photo: iStock


Have you ever asked yourself what you would do if you were president? Saxo Bank’s Chief Economist Steen Jakobsen did just that in: Steen's Chronicle: 'If I were president...'

-- Edited by Adam Courtenay

Michael O'Neill is an FX consultant at IFXA Ltd. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.

Missed a day? Here’s what we had to say during our Asian session and our regular European Morning Markets, From the Floor and Mid-session Europe.
John Roberti John Roberti
dear Michael, WTI closed at 51,51 yesterday with a 40 cents jump at last minute! It stayed there the whole night and it is coming back to starting point now, while USDcad remained fairly stable the whole time (20 bips fluctuations). Dollar appear more stable this morning How do you evaluate this situation? your opinion would be appreciated
Michael O'Neill Michael O'Neill
Hi John: The WTI retreat this morning is likely just a bit of profit taking sparked by the US dollar uptick vs the majors (except Kiwi and yen) Oil prices may be going higher but it won't be a one-way street. There hasn't been any domestic data of note for USDCAD traders to follow, so oil and US dollar sentiment are the drivers. The break of the 1.2740-70 area in May sparked the rally so it stands to reason that it may act as resistance this time. However, if 1.2780 trades, we are likely to see a more prolonged 1.2650-1.2950 consolidation period.
John Roberti John Roberti
Thanks for your opinion on the level at which you consider the usdcad as linked to a range. could you indicate also the downside level of WTI at which you would consider the WTI as range bound rather than bullish to 55. Is 49,90 a significant level?
Michael O'Neill Michael O'Neill
It is rather subjective, but below 48.50 whihc is where the uptrend line from the Feb low comes into play as you can see by the chart
John Roberti John Roberti
thanks again


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail