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Dean's Daily FX Update – 04 October 2017
In the Zone
- GBPUSD
- NZDUSD
- Gold
- Silver
Noteworthy News
- Talk from the chief Brexit negotiator in the UK suggesting that the UK are happy to walk away with no deal. This would cause carnage on the FX markets.
Recap
It was another subdued day yesterday as I get the feeling that the market has already cast one eye towards the US employment report on Friday. The NFP data is expected to be a low one at around 80K, I am not sure how to interpret this though because I suspect that the next two months could be influenced by the recent hurricanes.
There was very little in the form of major economic news yesterday and this led the dollar to trade somewhat mixed against the major pairs. President Trump continues to use twitter as his personal sounding board, the thing to monitor here is that the market is starting to ignore these tweets.
The EURUSD fell yesterday but as we suspected ran into buyers around 1.1710 with strong buying interest at 1.1700. This was fairly predictable as this is the 200 week MA, the pair traded as high as 1.1775 and again this was major resistance and the 100 hour MA level. So once again the range prevailed, these two levels remain the buying and selling levels for me this morning and I suspect that it will be the NFP data on Friday that dictates where it breaks.
Since July, the top in the USDJPY has been defined by the 112.85 – 113.00 level and this was again evident yesterday. This level has been breached 4 of the last 5 days and the move has failed each time which does not bode well for the buyers. The good news for the buyers is that each fail has resulted in a shallower correction which suggests that at some point the market will break and run.
It seems as though all the pairs are trading at key support levels and we may see some of the moves we encountered unwind ahead of the NFP data read on Friday.
Important Economic Data out today
10:30 GBP PMI Services
Consensus: 53.2
Effect: Actual higher than expected is good for the GBP
14:15 USD ADP Non-Farm Employment Change
Consensus: 131K
Effect: Actual higher than expected is good for the USD
16:00 USD ISM Non-Manufacturing PMI
Consensus: 55.5
Effect: Actual higher than expected is good for the USD
16:30 USD Crude Oil Inventories
Consensus: -0.5M
Effect: No consistent effect on the USD
19:15 EUR ECB President Draghi Speaks
Consensus: None
Effect: More hawkish than expected is good for the EUR
21:15 USD Fed Chair Yellen Speaks
Consensus: None
Effect: More hawkish than expected is good for the USD
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