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06 March 2017 – Dean Forex Market Commentary

06 Mar
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06 March 2017 – Dean Forex Market Commentary

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Dean’s Daily FX Update – 06 March 2017

The Fed seemed to be on a mission this week to illustrate that they were considering hiking interest rates mid-March, this meant the market come to a grinding halt on Friday as the market waited on the press conference from Fed Chair Yellen. She did not disappoint and although she reiterated the Fed are still data dependent, she could not do more to assure the market that come March 15, the FOMC will hike rates.

This was the confirmation that the market needed, and if ever you wanted to see a “buy the rumour, sell the fact,” trade – this was it. The greenback did a lot of work the last week, to put it into perspective, this time last week there was a 30% chance of a rate hike – this week those odds are sitting at 94%. The USD crumbled after the speech and I suspect that we may see something similar on Sunday evening in the Asian Pacific session as traders take profits.

The odd one out was the EUR, the EURUSD pushed through resistance and actually finished the week in positive territory as fresh legal worries for the Le Pen triggered a short squeeze. I am not sure how much of this politicking, but it reiterates for me my fear of trading this pair. From a technical analysis it seems as though the EUR found resistance a major line in the sand of 1.0630, this will be pivotal next week, a candle close above this level and we could open up to another test of 1.0700, more resistance means 1.0520 is back in play.

Cable is suffering from something similar and the market is still too aware of the Brexit repercussions, both from the EU and closer to home in the form of Scotland wanting to leave the UK. GBPUSD did manage to bounce from 1.2200 and close at around 1.2290 on Friday, this has been recent support/resistance and early direction will be key. The pair does look likely to continue this rally, but there are too many fundamental aspects in play for me.

The USDJPY has been trading like a vicious roller coaster of late, with rate hike expectations rising, so did the JPY. The pair traded as high as 114.75 before retreating to 113.80 on Friday, that is a solid effort but considering the pair started the week at 111.50 it really is not huge. I am looking for this pair to test 113.00 again before we see another bounce.

The USD had its best run of the year against the commodity currencies as it ate into both gold and oil this week, it started retracing in all pairs on Friday as the commodity pairs rallied. As with the rest of the major pairs, I suspect that the NZD and CAD will both continue their rallies which started on Friday. The AUD is a little tougher to read as it has a lot of event risk to contemplate this week.

Considering Yellens comments on Friday night, the non-farm payroll data becomes HUGE this coming Friday. What kind of reading would leave the rates on hold? Probably around 50K, while this is highly improbable we did see something this terrible a couple of months ago. Yellen has without a doubt stoked much optimism, and I think the market will now start shifting their attention to future meetings.

Let’s first deal with next week before we look forward – but it’s hard to ignore the fact that, “it’s about to get interesting.”

Daily Ranges 06/03/2017

Majors

EURUSD

Resistance                                          1.0600 – 1.0620

Support                                                1.0520 – 1.0490

GBPUSD

Resistance                                          1.2300 – 1.2320

Support                                                1.2230 – 1.2210

AUDUSD

Resistance                                          0.7590 – 0.7620

Support                                                0.7540 – 0.7510

NZDUSD

Resistance                                          0.7060 – 0.7080

Support                                                0.7010 – 0.7000

USDCAD

Resistance                                          1.3400 – 1.3415

Support                                                1.3350 – 1.3330

USDJPY

Resistance                                          114.40 – 114.70

Support                                                113.60 – 113.20

USDCHF

Resistance                                          1.0130 – 1.0150

Support                                                1.0090 – 1.0070

Rand

USDZAR

Resistance                                          13.1225 – 13.1750

Support                                                13.0260 – 13.0000           

EURZAR

Resistance                                          13.8580 – 13.8750

Support                                                13.7530 – 13.7140

GBPZAR

Resistance                                          16.1250 – 16.1570

Support                                                15.9730 – 15.9480

Minors

AUDCAD

Resistance                                          1.0170 – 1.0200

Support                                                1.0100 – 1.0070

AUDJPY

Resistance                                          86.70 – 87.00

Support                                                86.20 – 86.00

EURCHF

Resistance                                          1.0690 – 1.0710

Support                                                1.0650 – 1.0630

EURGBP

Resistance                                          0.8630 – 0.8660

Support                                                0.8570 – 0.8550

EURJPY

Resistance                                          120.80 – 121.00

Support                                                120.10 – 119.80

GBPJPY

Resistance                                          140.50 – 140.70

Support                                                139.60 – 139.30

GBPCAD

Resistance                                          1.6450 – 1.6480

Support                                                1.6360 – 1.6330

GBPCHF

Resistance                                          1.2425 – 1.2450

Support                                                1.2365 – 1.2330

Indices

DE30

Resistance                                          12100 – 12150

Support                                                11970 – 11950

UK100

Resistance                                          7390 – 7410

Support                                                7320 – 7300

US500

Resistance                                          2400 – 2450

Support                                                2370 – 2350

US30

Resistance                                          21150 – 21200

Support                                                20950 – 20900

SA40

Resistance                                          44800 – 45000

Support                                                44200 – 44000

Commodities

BRENT

Resistance                                          55.90 – 56.00

Support                                                55.00 – 54.80

XAUUSD

Resistance                                          1254.00 – 1250.00

Support                                                1225.00 – 1215.00

XAGUSD

Resistance                                          18.00 – 18.10

Support                                                17.70 – 17.30

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