USD Rallying on Monday

The US dollar has continued to rally over the European morning on Monday with the index breaking above the 97.42 level. Data strength at the end of last week is keeping USD bid here. With no tier-one US data scheduled this week, USD strength should persist. The Trump impeachment trial will be watched by traders this week though, as yet, no significant market volatility is expected around proceedings.

Euro Under Pressure

EUR/USD has been lower today as the rally in USD keeps price-weighted. EUR/USD has now broken back beneath the bearish trend line following the latest rejection at the 1.1166 level. The December ECB meeting minutes released last week highlighted a more positive tone from the ECB. However, with key data points still underperforming, sentiment remains negative.

GBP Heading Lower

GBP/USD is under pressure over early trading on Monday. The rally in USD is weighing on the G10 currency bloc. Last week, underperformance in GDP and CPI in the UK hit GBP. This week, traders are waiting on PMI data towards the end of the week. GBP/USD trades 1.2966 last.

SPX500 Pulls Back From Highs

Risk assets have started the week on a softer note with the SPX500 pulling back slightly from the recent 3329.78 highs to trade 3319.78 last. Now that the US/China trade deal has been signed, focus will move onto the second round of trade talks with the market awaiting a schedule for the first of these meetings.

JPY & Gold Lower

Safe havens have been a little softer at the start of the week, given the rally in USD. Despite the pull-back in equities, risk assets still remain near highs and the outlook is bullish, keeping safe-haven flows subdued. XAUUSD trades 1560.15 last, well above the 1556.75 level once again. USDJPY trades 110.15.

Crude Lower Despite Supply Fears

Oil prices have been lower at the start of the week, retracing from the gap higher at last night’s open. The gap occurred in response to news that a key Libyan oil pipeline had been closed down by militia there, sparking fears of supply shortages. Widespread protests in Iraq have also raised fears of fresh violence there. However, crude has so far retraced most of the gap higher, trading back down to 58.72 last.

Loonie At Resistance

USD/CAD continues to trade just beneath the 1.3068 level today. Following a break above the level late last week, price has since come back down. However, with USD rallying today and with crude retreating, the chance of further upside looks likely.

Aussie Sinking

AUD/USD has been lower today as the reversal from the .7027 continues. Price is now fast approaching the .6850 level, with the rally in USD weighing here. Employment data in the middle of the week will be the main domestic data focus for AUD and a weak number could see selling intensify.