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Dean's Daily FX Update – 03 August 2017
In the Zone
- EURUSD
- GBPUSD
- AUDUSD
- ALSI
- Oil
Noteworthy News
- With tensions between China and the US starting to raise, we could see US take the first step towards trade duties in the form of retaliation in the form of intellectual property.
Recap
The market had all hands on deck as they eagerly awaited the ADP employment data, historically this has been a good precursor to the NFP report, although in the last 6 months there has not been a consistent correlation. The report slightly missed and the initial reaction was for the market to be left disappointed, but I read into this as there is still some strong job growth.
The EURUSD was the major benefactor of this move, as the pair had a brief break above 1.1875 which was first time since 2015 that the pair has traded as high. The first attempt failed but the second attempt traded high enough to trigger stops and it was not long before the pair raced to a high of 1.1910. The EURUSD closed a lot lower after that, but the risk this morning is for the pair to launch another assault at 1.1875.
The GBPUSD was a little choppy today although the bulls are still holding onto the bias, we have multiple failed attempts at 1.3250, and this level is quickly forming a triple top. The BOE are meeting today and although we are starting to see some calls for a surprise hike, I am of the opinion that the rates will be unchanged. The market will be watching the language of the press conference and if anything is interpreted to be hawkish, then that will be the catalyst for the pair to trade through major resistance.
The market may start to dry up in liquidity ahead of the NFP read tomorrow, so please keep that in mind when entering a trade. I cover most the pairs in the video this morning, but I suspect that the major entries in the commodity pairs have been reached and we can start to search for secondary entries.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
10:30 GBP Services PMI
Consensus: 53.6
Effect: Actual higher than expected is good for the GBP
13:00 GBP Monetary Policy Summary
Consensus: None
Effect: More hawkish than expected is good for the GBP
13:00 GBP Official Bank Rate
Consensus: 0.25%
Effect: Actual higher than expected is good for the GBP
13:30 GBP BOE Governor Carney Speaks
Consensus: None
Effect: More hawkish than expected is good for the GBP
14:30 USD Unemployment Claims
Consensus: 242K
Effect: Actual lower than expected is good for the USD
16:00 USD ISM Non-Manufacturing PMI
Consensus: 56.9
Effect: Actual higher than expected is good for the USD
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