EURUSD – Last week the Euro virtually went nowhere and continues to trade in its weekly trading range. Strong upside impulsive and weak corrective moves in the Euro in the past few weeks suggest that perhaps the Euro will make another stride to its top boundary at 1.14800.
In the bigger picture however, the Eurozone continues to self-destruct. Last week, Greek banks decided to charge their clients 0.15% to exchange 500-euro bills with smaller denominations bills. This shows that the banking crisis in Greece is far from being over as they now have to exert another tax (confiscation) to it’s depositors to help keep the banks from making profit. Greek banks are in huge trouble. They have lots of non-performing loans, interest rates are exceptionally low, and not many people qualify to borrow money. Charging this new tax also helps the banks keep depositors money in the digital banking system, essentially bringing in a new ammo for the “war on cash”.
USDCAD – As mentioned in a previous weekly update, we should see a bounce off the 1.2830 level. I’m still bullish on the USD for the time being and expect the USDCAD price be higher by the end of the year. There is just too many issues with commodities and in particular the price of oil for the Canadian dollar to be strong at this time.
While keeping the same discussion about taxes and confiscations by banks, Canada reported something rather interesting last week during their latest budget proposal. The reinforcement of the “bail-in” scheme which will convert depositors money into bank capital to help keep the Canadian banks solvent. Considering that the two strongest sectors in Canada, Real-Estate and Oil have serious problems this bail in scheme definitely has it’s merit. Cyprus had their bank bail-in in 2013.
WTI – Last week, oil made a run up to an important price level in the market. Not only did the oil of price fill a gap, it bounced off a strong overhead resistance zone. During the price run up, the supply of oil continued to increase which lead me to believe that the higher oil prices is just speculation. I believe oil could could stall at this point and start trending lower. I will be looking for shorting opportunities from here with stops above the 42.58 level.