Market Drivers This Morning
As is usual for a Monday in FX, traders are trying to get a feel for the market, digesting the weekend news which has seen the US threatening sanctions on Saudi Arabia, Brexit talks stalling (again) and financial markets in a general mood of nervousness over the stock market falls seen last week
Consequently, the JPY and CHF have been the net gainers at the start of the week, with the USD losing some of its safe-haven appeal as factors such as the US midterm elections and recent US data starting to weigh a little. Later on today, we get the latest retail sales figures out of the US, covering the month of Sep, and any weakness here may see the market looking to diversify a little more from the USD - and we point to potential losses on USD/JPY and USD/CHF.
The EUR is still unable to find any significant confidence with Italy's deficit plans still putting it at loggerheads with the EU bloc, so, for now, EUR/USD is reluctant to retest the 1.1600 mark which contained buying last week.
GBP gapped lower on news that the Brexit talks have stalled again, with the Irish border issue still causing many problems, as the inclusion within the customs union is facing much opposition. Brexiteers and DUP MPs continue to criticise the EU's lack of flexibility in the face of the concessions offered so far by the UK.
Elsewhere, Oil prices are pretty steady given the US spat with Saudi Arabia, with CAD traders waiting for direction before deciding on which way to move from the 1.3000 level. Resistance is seen into 1.3150-1.3200 if we move higher, while on the downside, we have already seen lows just under 1.2800.
Market sentiment will be much clearer once we get US data out this afternoon, so we seem to be feeling our way around and testing key order levels for now.