Top 3 charts of the week - USDCAD, ITA40, SOYBEAN

Summary:
- CAD benefits from Trump’s words and rebound on the oil market
- FTSE MIB (ITA40) pulls back amid political uncertainty
- Soybean benefits from disastrous plantings data

USDCAD

The Canadian dollar is one of the best performing majors this week thanks to rebound on the oil market and Donald Trump’s remarks on steel and aluminum tariffs. Oil is trading higher due to developments in the Middle East. However, what seems to be true market mover for CAD is Trump’s pledge to exclude Canada and Mexico from steel and aluminum tariffs. Such a move is said to be a predecessor to ratification of the USMCA agreement. The pair is trading below the 1.34 handle and has broken below the lower limit of the triangle pattern. In case the decline is to prolong, a test of the lower bound of the ascending wedge pattern cannot be ruled out.

Source: xStation5

FTSE MIB (ITA40)

The Italian stock market index saw a sharp turn lower at the beginning of this week. While the majority of global indices also declined on the back of trade and growth concerns, ITA40 took a hit from domestic factors as well. Italian coalition partners are skirmishing over the fate of some of Italian banks what is pressuring the sector and risks a potential break of coalition in case the conflict intensifies. Moreover, the prospect of renewed tensions between Rome and Brussels over the Italian budget is not helping either. ITA40 is trading near the 23.6% Fibo level after bouncing higher off the 38.2% retracement level. Re-launch of Italian-EU conflict could drag Italian shares significantly lower with financial sector being the most exposed.

Source: xStation5

Soybean

Upward momentum on the grains markets is primarily present on corn. Nevertheless, the reasons behind bulls’ dominance are the same for soybean - plantings data. When it comes to soybean, only 19% of planned acreage was sown so far, compared with 5-year average of 47% and last year’s 53%. Significant delays in plantings can be ascribed to 2 factors. Firstly, soil is still moist following floods that have stormed the US earlier this year. Secondly, uncertainty over demand from China caused the US farmers to be more averse to soybean. The second reasons also hints that gains may be short-lived. Price climbed back above the external 138.2% Fibo level and local lows from mid-2018. The nearest resistance levels to watch are localized at 860 and 880 handles.

Source: xStation5

Economic calendar: Fed Chair Powell Testimony and BoE's Gov Bailey speech
Morning wrap
Daily summary: Market sell-off continues
Silver follows gold sell-off: -9%!
USDJPY bounces off 104.00 area
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