Forex news from the European trading session – 2 February 2021
CAD leads, AUD lags on the dayEuropean equities higher; E-minis up 0.9%US 10-year yields up 2.9 bps to 1.108%Gold down 0.9% to $1,844.03Silver down 5.3% to $27.51WTI up 2.4% to $54.84Bitcoin up 3.7% to $34,913
The market is feeling a sense of calm as the retail trading frenzy abates, leading to more positive tones in broader market sentiment.
That helped to see European equities push higher alongside US futures, as GME is seen on the retreat in pre-market trading. Of note, the silver fever is also starting to cool today after the CME raised the margin on silver futures by 18%.
Silver was down to around $28.20 in early European trading before plunging to a low of $27.21 before holding around 5% lower now closer to $27.50.
Despite the firmer risk tone, the dollar is holding firm in the major currencies space as it reversed some of its earlier losses during the session.
NZD/USD retreated from 0.7193 to 0.7150 levels while EUR/USD fell from 1.2080 to 1.2026 as price falls to a two-month low with 1.2000 in sight.
USD/JPY maintained a modest advance around 104.90 to 105.05 in general, while USD/CAD bounced off a low of 1.2782 to around 1.2810-20 now but still lower on the day as oil prices push higher on better risk sentiment.
As things stand, it is looking like the dollar short squeeze is stretching a little further into the new month and that is made more evident now as the market exudes calmer tones following the chaos and memes over the past week.
That said, the Fed put remains very much in play and with broader equity markets still feeding off that signal, it may only be a matter of time before the dollar does as well. But for now, we’ll see if the squeeze can start to challenge key technical levels.