The market continues to lean towards a Brexit deal, but hopes were pinned on weekend talks, which will make for interesting trades, says Adam Button of ForexLive.com.
US stimulus talks continue to move in a positive direction but we're not at the final stages yet.
It was OPEC+ that made its move on Thursday and it wasn't the three-month extension the market had expected. Instead, OPEC opted for a plan to raise production 500k bpd each month starting in January. We would have expected some crude selling on that but after a small blip, WTI crude found a base and rallied back above $45.50. Brent also finished more than 1% higher.
The adage that applies here is: When a market can't fall on bad news, it can't fall at all. Holding well above the recent range in crude through the OPEC news is a good sign for the bulls. OPEC still has 7.2mbpd of spare capacity so that will certainly keep oil from running higher but the surplus in inventories will slowly be run off in the months ahead and at some point, in 2021, demand will be strong.
That was reflected in the Canadian dollar as USD/CAD fell to the lowest since 2018. The break of 1.30 clears out a key support level and highlights the case for a further decline on heavy Canadian fiscal spending and its commodity riches.
The EUR/USD breakout resumed as it climbed above 1.21 and it was joined by the Australian dollar in a climb above the September high of 0.7411 to the best levels since 2018.
The dollar is behaving like a classic bear market, as intermittent retracements are met with renewed selling. The trigger last week was more positive talk on US stimulus. It's tough to know if differences can be bridged but Democratic leaders said they could work with the bipartisan group's proposal and McConnell said Democrats were acting in good faith.
Learn more about Adam Button by visiting ForexLive.com.
