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06 July 2017 – Dean Forex Market Commentary

06 Jul
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06 July 2017 – Dean Forex Market Commentary

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Dean’s Daily FX Update – 06 July 2017

In the Zone

  • All

Noteworthy News

  • There was some response out both France and the UK around the North Korea debacle yesterday. With the G20 meetings starting today, I suspect that the US may turn the heat up on the rest of the world for a response.

Recap

If you were actively trading the market yesterday then you would have noticed a little bit of intraday volatility, if you only look at the charts on a daily occurrence thought it would seem as though the market was rather quiet and range bound. The market waited keenly for the FOMC meeting minutes, I have mentioned in the past that I loathe these minutes as I believe that the accompanying statement and the talking heads in the days following the announcement covers everything.

The minutes last night highlighted that the Fed were divided over the balance sheet runoff, they believed that low inflation was temporary, supported gradual rate hikes and were debating the current employment data. My argument is that we already knew this, there is very little chance of a surprise ever coming out of these minutes and it essentially left the FX pairs unchanged on the day.

I have been hammering home that I feel that the USDJPY may hold the key that unlocks the FX market, and yesterday seemed to indicate this with an initial attempt for price to dip below major support at 113.00 last night. This level failed and found some support as the pair started moving back towards 113.60, this represents a topside resistance which has failed twice already this week and I am seeing this as signs that momentum may be slowing, a break above will target 114.25 whilst if sellers are able to contain the initial move, then 112.00 becomes the next target.

EURUSD seems to be flirting with the market as it trades close on both the 200 hour MA at 1.1335 and the 100 hour MA at 1.1380 and these levels may be where the sellers will start building offers. I am starting to wonder if the market is anticipating a good employment report out of the US tomorrow.

Last night has left the market exactly where it was 24 hours ago – in dire need of the US to pull us out of these tight ranges. There is sign of life in the dollar index though, it may just a need a little nudge from somewhere, the employment report and G20 may be the catalyst for it.

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