Jan 25th, 2016: Euro Wobbles Amid Stable Conditions

• This morning, markets are generally stable, with a slight positive bias after low key weekend from China and a small pop in oil prices.

• The dollar index has a slight negative bias, while the USD/ JPY continues to rally.

• Despite this, the euro is struggling to gain any sort of traction after Friday’s below par manufacturing PMI data across the eurozone.

• By contrast, the British pound is putting together a string of positive sessions.

• Commodity currencies continue to recover, with both the AUD/ USD and NZD/ USD posting gains this morning.

Coming up today: 

• We start the day with German Ifo business climate at 09.00.
• This is followed by ECB President speaking at 18.00.

Trade Idea: 

• The British economy has not been immune to the recent collapse in oil prices, with high profile producers such as BP and oil producing regions such as Aberdeen. It’s no coincidence that the GBP/ USD has recovered over the last couple of days as oil pop higher. We may not have reached the bottom for oil, but the general mood appears positive for the short term.

• A good way to play this is a HIGHER trade predicting that the GBP/ USD will close above 1.4400 in 14 days for a potential return of 160%.

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