We started the year off with strong US economic data, and this was the catalyst for the greenback to go on a bit of a march early in the New York session. The recent run in the dollar has been deep and I was enthused to see some profit takers come into the market and for the USD to take a breather later on in the session. I am always on the lookout for some form of correction after such a deep move and I continue to wait patiently for opportunity, there was definitely evidence of increased trading activity yesterday and hopefully we will get closer to market normalization next week.
Dean's Daily FX Update – 04 January 2017
In the Zone
- EURUSD
- USDJPY
- USDCHF
Noteworthy News
- None
Recap
We started the year off with strong US economic data, and this was the catalyst for the greenback to go on a bit of a march early in the New York session. The recent run in the dollar has been deep and I was enthused to see some profit takers come into the market and for the USD to take a breather later on in the session. I am always on the lookout for some form of correction after such a deep move and I continue to wait patiently for opportunity, there was definitely evidence of increased trading activity yesterday and hopefully we will get closer to market normalization next week.
The EURUSD had another brief test at 1.0360 yesterday and again it bounced, I did mention that I was hesitant to trade this pair as I was not sure where the low was, but it seems as though the market has drawn a line in the sand at those levels. With every successful bounce at those levels, I get more confident in looking for some opportunity – I will wait patiently to see if any opportunity presents itself.
Cable has been a little bit choppy of late and yesterday was no different, it did test the recent low at 1.2200, but like the EUR it managed to have a sharp bounce all the way up to 1.2270. The 100 hour MA at 1.2270 is providing the major resistance level for now and the bulls will want to see a break and close above that area to feel confident. On the low side we need to remain above 1.2225 – 1.2200, a close below those recent lows and the sellers will be firmly in control.
The NZDUSD is very much range bound for now, as it has been for the best part of 2-3 weeks. The range has been 0.6885 – 0.6970 and this range held again yesterday, I need to see this range broken before I contemplate trading this pair.
Traditionally there is a strong correlation between oil and the USDCAD, this was not the case yesterday. Oil was beaten down yesterday by 2.35% and this usually suggests that we should see the USDCAD move in an upward direction –yet the pair was largely unchanged. There is conflicting signals in this pair and so I am trading with a little bit of trepidation this morning.
Under the radar at the moment but the USDZAR has proven to be very robust of late, with everything else going on around the world it seems as though our own political scandals are in the shadow. If you throw in the recent recovery in metal prices and we have a recipe to strengthen further, don’t be surprised to see the USDZAR testing the 13.50 level again.
Daily Ranges 04/01/2017
Majors
EURUSD
Resistance 1.0450 – 1.0480
Support 1.0385 – 1.0370
GBPUSD
Resistance 1.2300 – 1.2320
Support 1.2240 – 1.2227
AUDUSD
Resistance 0.7240 – 0.7250
Support 0.7200– 0.7370
NZDUSD
Resistance 0.6950 – 0.6972
Support 0.6900 – 0.6885
USDCAD
Resistance 1.3460 – 1.3474
Support 1.3406 – 1.3390
USDJPY
Resistance 118.00 – 118.50
Support 117.20 – 117.00
USDCHF
Resistance 1.0270 – 1.0292
Support 1.0200 – 1.0190
Rand
USDZAR
Resistance 13.7926 – 13.8400
Support 13.6480 – 13.6120
EURZAR
Resistance 14.4120 – 14.4590
Support 14.2815 – 14.2550
GBPZAR
Resistance 16.9287 – 17.0000
Support 16.7620 – 16.7211
Minors
AUDCAD
Resistance 0.9723 – 0.9740
Support 0.9680 – 0.9667
AUDJPY
Resistance 85.40 – 85.60
Support 84.65 – 84.53
EURCHF
Resistance 1.0710 – 1.0728
Support 1.0687 – 1.0670
EURGBP
Resistance 0.8530 – 0.8540
Support 0.8460 – 0.8450
EURJPY
Resistance 123.20 – 123.45
Support 122.45 – 122.18
GBPJPY
Resistance 144.80 – 145.00
Support 143.70 – 143.50
GBPCAD
Resistance 1.6528 – 1.6540
Support 1.6440 – 1.6418
GBPCHF
Resistance 1.2610 – 1.2625
Support 1.2530 – 1.2500
Indices
DE30
Resistance 11560 – 11650
Support 11465 – 11440
UK100
Resistance 7185 – 7200
Support 7100 – 7085
US500
Resistance 2253 – 2260
Support 2240 – 2232
US30
Resistance 19900 – 20000
Support 19750 – 19700
SA40
Resistance 44800 – 45000
Support 43700 – 43500
Commodities
BRENT
Resistance 57.10 – 57.30
Support 55.80 – 55.40
XAUUSD
Resistance 1160.09 – 1162.07
Support 1150.60 – 1145.20
XAGUSD
Resistance 16.17 – 16.23
Support 15.98 – 15.90
Important Economic Data out today
- 11:30 GBP Construction PMI
- 21:00 USD FOMC Meeting Minutes
High Risk Investment Warning: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. Before deciding to trade the products offered by BlackStone Futures you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. BlackStone Futures provides general advice that does not take into account your objectives, financial situation or needs. The content of this Website must not be construed as personal advice. BlackStone Futures recommends you seek advice from a separate financial advisor. Please take the time to read our Risk Disclosure Notice.
