A combination of reduced liquidity and a lack of economic data during the day meant that the market was relatively quiet yesterday as it waited on the release of the FOMC minutes. I am not entirely certain as to why the market weighs this reading as important – in my mind the market would have priced everything in already.
Dean's Daily FX Update – 05 January 2017
In the Zone
- AUDUSD
- USDCAD
- USDZAR
Noteworthy News
- Mike Pence already talking about tax reform and overhauling Obamacare yesterday. The countdown to Donald Trump’s inauguration has started and the market will be watching to see what how Trump goes about “draining the swamp.”
Recap
The report failed to give any firm hawkish commitment – and considering the Fed Chair Yellen over the last couple of years, this was to be expected. The kneejerk reaction was for the USD to trade lower to daily lows before the market realised we will probably see some rate hikes this year and we saw a swift reversal.
The EURUSD had a nice move yesterday all the way up to 1.0500 on the release before falling back to 1.0450. What we have established this week is that the market has found a low at 1.0350, the top side come in between 1.0450 and 1.0520 which are both really strong resistance levels. The buyers have got a small advantage and the proof will be whether they can hold on to it and push through those hurdles.
The cable is once again given me conflicting views on the intra-day and daily charts, the reason is that once again we are at a cross roads. The level to watch this morning is 1.2340, this seems to be a tough resistance level, and we have had 3 attempts to break through this level. The price to me seems as though it is running out of momentum, so be cautious.
The real movers yesterday were the commodity currencies. Unlike Tuesday, the USDCAD finally formed positive correlation with oil yesterday, and as oil recovered by a little more than 2% so the “loonie” fell and traded through 1.3300 and down to as low as 1.3280. This is a pair that I have my eye on this morning as I look for the USDCAD to form a base down at current levels.
We cover both the AUDUSD and NZDUSD in this morning’s video.
Daily Ranges 05/01/2017
Majors
EURUSD
Resistance 1.0523 – 1.0545
Support 1.0410 – 1.0390
GBPUSD
Resistance 1.2330 – 1.2350
Support 1.2240 – 1.2227
AUDUSD
Resistance 0.7300 – 0.7330
Support 0.7240– 0.7220
NZDUSD
Resistance 0.7000 – 0.7020
Support 0.6930 – 0.6910
USDCAD
Resistance 1.3375 – 1.3400
Support 1.3270 – 1.3260
USDJPY
Resistance 117.70 – 117.95
Support 116.20 – 116.00
USDCHF
Resistance 1.0270 – 1.0292
Support 1.0170 – 1.0150
Rand
USDZAR
Resistance 13.7480 – 13.7615
Support 13.5715 – 13.5250
EURZAR
Resistance 14.3350 – 14.3800
Support 14.2275 – 14.1800
GBPZAR
Resistance 16.8287 – 16.8700
Support 16.6940 – 16.6490
Minors
AUDCAD
Resistance 0.9713 – 0.9723
Support 0.9680 – 0.9667
AUDJPY
Resistance 85.40 – 85.60
Support 84.80 – 84.70
EURCHF
Resistance 1.0720 – 1.0740
Support 1.0687 – 1.0670
EURGBP
Resistance 0.8530 – 0.8540
Support 0.8480 – 0.8450
EURJPY
Resistance 123.20 – 123.45
Support 122.45 – 122.18
GBPJPY
Resistance 144.60 – 144.90
Support 143.50 – 143.30
GBPCAD
Resistance 1.6460 – 1.6490
Support 1.6367 – 1.6350
GBPCHF
Resistance 1.2610 – 1.2625
Support 1.2550 – 1.2520
Indices
DE30
Resistance 11600 – 11650
Support 11500 – 11440
UK100
Resistance 7200 – 7250
Support 7120 – 7100
US500
Resistance 2260 – 2280
Support 2240 – 2232
US30
Resistance 19900 – 20000
Support 19750 – 19700
SA40
Resistance 44800 – 45000
Support 44000 – 43800
Commodities
BRENT
Resistance 56.90 – 57.10
Support 55.60 – 55.30
XAUUSD
Resistance 1170.09 – 1185.00
Support 1158.00 – 1153.20
XAGUSD
Resistance 16.60 – 16.80
Support 16.28 – 16.00
Important Economic Data out today
- 11:30 GBP Services PMI
- 15:15 USD ADP Non-Farm Employment
- 15:30 USD Unemployment Claims
- 17:00 USD ISM Non-Manufacturing PMI
- 18:00 USD Crude Oil Inventories
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