Major forex pairs have gained on the Usd overnight in response to positive equity market trade trade that has allowed risk tolerance to get a foothold in a week that leads up to the Easter bank holidays. It may be that trade desks will use the front end of the week to align positions so that they can coast into the close on Thursday already placed in whatever they need to be. The test of equity buying is tested with the start of earnings season, something that may really get the Usd under pressure if it is positive enough to allow stocks to hold current levels.

“The Treasury markets are absorbing a lot of newly issued notes and at the moment are doing well in regard to supply and demand” said Trade team. “There are 3:1 buyer ratios at the Fed auctions and that is allowing the dollar the chance to counter the negative reaction from stocks getting bought. The day one of these auctions fails to garner that ratio of interest, as just happened to the German Bundesbank auction, is the day that long-Usd market resolve will be thoroughly tested”. They added,  “It has not happened yet, but with record debt numbers getting sold over the next six months it may just be a case of when, not if, the Fed is forced into backing its mandate of buying unwanted Treasury bills”.

Monday is a quiet day of economic releases, and all eyes will turn to Canadian Building Permit and Ivey PMI numbers at 08:30 EDT and 10:00 EDT. It seems that the 1.2200 – 1.2400 trading channel will break one way or the other, if not today at some stage this week, in reaction to the raft of economics coming from Canada. “Our focus is on two things right now; the major pairs holding the stolen ground on the dollar at the start of the week, and the Usd/Cad pair” said the Trade Team.