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As doubts grow of over-supply in the Oil market, its price continues to drift lower, putting pressure on the CAD, I expect this weakness of the CAD to be more prevalent than the USD weakness of recent. At this point we can see a slow bullish grind on intra day time frame towards W H4/D H5 confluence zone 1.3540-50. The POC zone (trend line, 50.0, D L3, Atr pivot, historical buyers) might spike the price up towards 1.3500, 1.3520 and if 1.3520 breaks towards 1.3550. The price is above W L3 and D L3 so the bulls are currently in control. The price should ideally stay above 1.3422 for bullish outcome.

Bank holiday's across parts of Europe is contributing to relatively subdued trade at the start of the week, with a number of major events scheduled for the coming days also likely aiding this.

Polls over the weekend continue to suggest that Theresa May's lead is slipping, with another from YouGov suggesting that the Conservatives are set to lose their majority. Of course, different polls are still giving us a variety of outcomes, with some still pointing to a comfortable majority for the Conservatives, which appears to be the most market friendly scenario. The memory of 2015 when the Conservatives performed much better than expected may well be helping to support the pound, even as some surveys paint a worrying picture for Theresa May.

While the UK election is likely to be a dominant theme for markets this week, there will also be a focus on the ECB meeting, which is also due to take place on Thursday. There has been a lot of speculation about how and when the central bank will withdraw its stimulus, with some suggesting they may hint at further reductions either this week or in September. The economy is undoubtedly on a positive trajectory but as the PMI reports showed this morning, it is still unbalanced with Germany being a significant driver of it.

Oil has been boosted a little this morning by reports that Saudi Arabia, Egypt, UAE and Bahrain have severed diplomatic ties with Qatar, accusing the country of supporting terrorist organisations. Still, Brent and WTI crude continue to languish near last week's lows, with traders appearing to doubt whether the coordinated measures undertaken by OPEC and non-OPEC members will be enough to address the oil glut. Brent has traded back above $50 again this morning but continues to look vulnerable having broken below here on Friday.

Still to come today we've got a number of economic reports from the US including services PMIs from Markit and ISM, as well as factory orders, unit labour costs and productivity figures. Last week's jobs report hasn't filled people with confidence in the US economy, despite another drop in the unemployment rate, although this hasn't deterred people from believing they'll raise rates next week.

Geo-political risk is set to dominate capital markets this week; it will be supported by a handful of central bank monetary policy decisions.

In the Gulf, the Saudi's, Bahrain, the United Arab Emirates and Egypt said they are suspending all travel to and from Qatar, citing Qatar's support of 'terrorist groups aiming to destabilize the region.'

In the U.K, citizens are dealing with the outcome of the weekend's terrorist acts as the political parties enter the final three-days of the nation's election campaign. The British snap election will be held on Thursday, June 8. In France, the French election will take place in two-rounds beginning on June 11.

In the U.S, fired FBI Director James Comey is set to testify before the Senate Intelligence Committee on Thursday about his conversations with President Trump regarding suspicion of Russian interference in the 2016 election. His testimony is expected to drive further moves in equities and the dollar in a recurrence of market swings last month.

The RBA, RBI and the ECB announce their respective monetary policy decisions on June 6, 7 and 8 – all three central banks are expected to leave their policies unchanged, however, the market is looking for guidance on QE reduction from Draghi.

Germany will release its April data for both manufacturing orders and output, while Canada will report its labor force survey and key housing starts, both for May.

1. Global equities questioning growth

Friday's underwhelming non-farm payroll (NFP) is testing market bets on improving global growth that's helped drive the value of global equities this year.

In Japan, the Nikkei's share average barely changed overnight, keeping close to a 22-month high scaled last week as the yen's rise stalls (¥110.48), while the broader Topix index fell -0.1%. The gauge closed Friday at the highest point in two-years.

In Hong Kong, the Hang Seng fell -0.4%, while the Shanghai Composite Index slipped -0.5%.

Elsewhere in the region, the Malaysia's benchmark gained +0.6% and Indonesian stocks climbed +0.2%, while Taiwan's Taiex increased +0.7%.

With the Saudi-led alliance cutting diplomatic ties with Qatar, Doha's QE Index dropped -7.7%, the most in three-years. While in Dubai, the DFM General Index fell -1.3%.

Note: Germany, Switzerland and France all have a bank holiday.

In Europe, indices are trading slightly lower in light trade due to bank holidays. The market reaction to this weekends terror attacks in London is having little impact, although travel and leisure names seeing some downside pressure on the FTSE 100.

U.S stocks are set to open in the red (-0.1%).

Indices: Stoxx50 -0.3% at 3579, FTSE -0.2% at 7530, DAX Closed, CAC-40 -0.6% at 5312, IBEX-35 -0.5% at 10850, FTSE MIB -1.0% at 20724, SMI Closed, S&P 500 Futures -0.1%.

2. Oil prices gain as Saudi Arabia cuts ties with Qatar

Ahead of the U.S open, oil prices are better bid after top crude exporter Saudi Arabia and other neighbouring Arab states cut ties with Qatar – the market is worried that increased tension in the Middle East will disrupt supplies.

Saudi Arabia, the United Arab Emirates, Egypt and Bahrain closed all transport links with top 'liquefied natural gas and condensate shipper' Qatar, accusing it of 'supporting extremism and undermining regional stability.'

Brent crude prices are up +35c, or +0.7%, to +$50.30 a barrel, while U.S West Texas Intermediate (WTI) is at +$48.03 a barrel, up +37c.

Note: With a production capacity of about +600k bpd, Qatar's crude oil output is one of OPEC's smallest.

However, the market is focusing on tensions within OPEC, which could potentially impact any agreement to cut production in order to support global prices. Brent crude prices are still down about -7% from their open on May 25, when OPEC opted to extend last November's production cuts into 2018.

The market outlier that is having an impact on OPEC product cuts supporting prices is U.S oil production – The rise in production has been driven by a record 20th straight weekly climb in oil drilling, with the rig count climbing by 11 in the week to June 2, to 733, the most since April 2015.

Gold is holding steady (+0.1% to +$1,280.90 per ounce) after hitting its highest in over six-weeks overnight, supported by Friday's disappointing U.S jobs data that appeared to dilute the prospects for an aggressive string of Fed interest rate hikes.

3. Yield curves remain flatter

U.S Treasury yields remain near the lowest level in seven months with last Friday's data on wage growth and hiring in the U.S labor market came in below expectations.

The report is unlikely to keep the Fed from raising rates in June (13-14), but the slow wage growth reinforces the view that stubbornly weak inflation could keep the Fed from raising rates again later in the year.

The yield on U.S 10-year Treasury notes has rallied less than +1 bps to +2.17%, after dropping -5 bps on Friday.

Elsewhere, the yield on Aussie 10-year government bonds have lost -2 bps to +2.39%. In the U.K, 10-year Gilt yields have climbed +2 bps to +1.06%.

4. Dollar seeks out direction

The 'mighty' USD has consolidated some of its recent losses after its declines following Friday's U.S jobs data. On Friday, the USD tested its lowest level across the board since November after non-farm payrolls underwhelmed – the markets seemed content to ignore that U.S unemployment rate (+4.3% vs. +4.4%) was its lowest level in 16-years.

The EUR (€1.1264) and GBP (£1.2888) trade slightly lower outright due to caution ahead of Thursday's ECB meeting and the U.K's general election. The single unit could gain again if the ECB speaks of plans to scale back monetary stimulus, but policymakers may be cautious of doing so given subdued core inflation.

In the U.K, sterling continues to be held captive by 'opinion polls' which point to waning support for the ruling Conservative party. Currently, the impact of weekend's terror attacks has been 'limited.'

Note: U.K election uncertainties have risen with some opinion polls seeing the Conservatives lead narrowing to only around +1-4% points ahead of Labour.

5. U.K May Services PMI Weaker Than Expected

Data this morning showed that the U.K's PMI for the dominant services sector came in weaker than expected in May, having hit a four-month high in April.

The measure fell to 53.8 from 55.8 the previous month and well below the expected 54.9 reading.

Digging deeper, IHS Markit said new orders grew more slowly, partly in response to a squeeze on household incomes as a result of a jump in inflation, and partly because some businesses have delayed making decisions ahead of the June 8 general election.

Despite the May dip, purchasing managers surveys more broadly point to a possible pickup in growth during Q2, to +0.5% from +0.2% in Q1.

The euro has ticked lower in the Monday session, as EUR/USD is currently trading at 1.1260. Traders can expect a quiet day from the pair, as German banks are closed for a holiday. In economic news, the German and Eurozone service sectors continue to expand.German Services PMI was unchanged in May, with a reading of 55.4, just above the forecast of 55.2 points. Eurozone Services PMI inched lower to 56.3, edging above the forecast of 56.2 points. In the US, today's key event is ISM Non-manufacturing PMI, which is expected to drop to 57.1 points.

The Federal Reserve holds its policy meeting on June 14, and the odds of a quarter-point increase continue to climb. The odds of a hike have climbed to 96%, according to the CME Group, up from 88% just a week ago. The markets have priced in a June move, and a dismal Nonfarm Payroll report has failed to put a dent in market confidence in a June rate hike. Traders should note that ahead of the March hike, the odds of a rate hike were also close to 100%, and the dollar actually lost ground after the Fed followed through with a quarter-point increase. An increase in interest rates represents a vote of confidence in the US economy, but the Fed continues to have some concerns. Inflation remains stubbornly low, despite a labor market that remains close to capacity. Fed policy makers are also scratching their heads over soft consumer spending, which has not kept pace with high levels of consumer confidence. As for additional rate hikes in the second half of 2017, the markets are skeptical, with the odds of a September rate hike at just 26%.

The Australian dollar extended strong recovery against its US counterpart, nearing 0.7500 on Monday.

Bullish acceleration was triggered on Friday on profit-taking and boosted by downbeat US NFP data which deflated the greenback. Strong bullish close on Friday that marked the biggest one-day gains since 15 Mar, left long bullish daily candle that underpinned fresh bulls.

Stronger than expected China's Service PMI data, released on Monday and rising geopolitical tensions in the Middle East sparked fresh acceleration higher that broke above former high at 0.7475 and cracked 0.7482 barrier (Fibo 76.4% of 0.7517/0.7369 downleg), shifting focus towards key barriers at 0.7517/22 (23 May peak/weekly cloud top), reinforced by 200SMA at 0.7527.

Daily indicators show room for extension higher, however, hesitation at these barriers could be anticipated.

Broken converged daily Tenkan-sen/Kijun-sen lines offer solid support at 0.7443 which is expected to hold corrective dips.

Res: 0.7500, 0.7520, 0.7535, 0.7573
Sup: 0.7460, 0.7443, 0.7420, 0.7400

Friday ended with the Cable edging moderately higher, amid the disappointment brought by the US NFP data. The rally caused another confirmation of the two-week down-trend, which now acts as the resistance line of a triangle pattern. This pattern is nearing its apex, with a breakout to occur by mid-Tuesday. The lower border of the triangle is much stronger, as it is a support line of a much larger pattern—the broadening rising wedge. Moreover, it is supported by a larger number of significant levels than the down-trend. Technical indicators are also in favour of the bullish scenario, thus, the GBP/USD pair is likely to take another shot at climbing over the 1.29 mark this week and pierce the resistance around that area, which is represented by the monthly pivot point.

The Buck's attempts to appreciate against the Yen at the end of the previous week were in vain, as downbeat US NFP data caused the given pair to erase all of that week's gains. Nevertheless, the Greenback appears to be reluctant to fall under the 110.50 mark, as it remained above this handle ever since it was retaken back in April. Technical indicators, on the other hand, suggest the USD/JPY is to continue slumping, but that might not be the case due to the breach of the three-week down-trend. Furthermore, the US Dollar is also supported by another trend-line circa 110.30, which should limit the possible losses and provide sufficient impetus for a future recovery.

The yellow metal traded above a significant level of support on Monday morning, as the commodity price was located above the 1,280 level. Due to the fact that the bullion could count on the support of the 61.80% Fibonacci retracement level at the 1,278.96 mark, a hypothesis of a continuation of the surge was made. The yellow metal’s price is most likely going to surge up to the newly calculated weekly R1, which is located at the 1,286.87 level. Moreover, the commodity faces no other resistance levels up to that mark, as even the upper Bollinger band is located above the weekly level of significance. On the other hand a decline might occur, in which case the metal will search for support in the weekly PP at 1,273.06.

After scoring major gains against the US Dollar during the second half of Friday’s trading session the common European currency had retreated on Monday morning. The EUR/USD currency pair had jumped on Friday at 12:30 GMT when the worse than expected fundamental US data was released. It is most likely that the currency exchange rate will continue its short decline until it encounters the support of the 55-hour SMA. On Monday morning the SMA was moving higher near the 1.1240 mark, and it was supported by the lower Bollinger band of the hourly chart. In the case of a surge the pair would then begin the ascent to the weekly R1, which is located at the 1.1344 level.

Spot Gold rose to six-week high at $1282 on Monday, extending strong rally from last Friday, when gold price was boosted by weaker dollar on disappointing US jobs data.

Terrorist attack in London over the weekend and rising geopolitical tensions in the Middle East, increased safe haven demand and further inflated gold price.

Friday's long bullish daily candle (the biggest one-day rally since 17 May) continue to underpin the action, after gold closed above $1276 pivot (Fibo 76.4% of $1295/$1214) on Friday and break above bull-trendline resistance signaled bullish continuation.

Fresh bulls may extend towards $1288 (21 Apr high), with key barrier at $1295 (17 Apr peak) expected to come in focus.

Initial supports lay at $1278 (session low) and $1276 (broken Fibo 76.4%) with broken daily cloud top ($1270) expected to contain extended corrective downticks.

Res: 1282, 1288, 1295, 1300
Sup: 1278, 1276, 1270, 1265