For some reason, regardless of whether the greenback was stronger or weaker, this week felt like one way traffic. We didn’t get any confirmation for the retracements, although trading off the daily chart it was plain to see that a retracement would be unlikely. This week was a perfect example of remaining patient, we saw some late moves late Friday evening and I hope that our patience gets rewarded with some handsome gains.
The NFP data was strong, yet the market shrugged this off as the market chose to concentrate on the weak wages. The market also decided to concentrate on the pending Senate vote on healthcare, there is a growing consensus that the bill in the current format will not get through the Senate and some adjustments will need to be made.
The EURUSD endured an epic battle between the bulls and bears between 1.0940 and 1.1000 for most of the week. The talk is that the bulls will drive this pair through 1.1000 again, I don’t disagree with them and I would not be surprised to see a large gap open on Sunday evening. I have my doubts on whether this gap will stay open as long, with the overwhelming polls this week, I suspect that a lot of the news is priced in – so be cautious.
Cable closed the week near the highs, levels of 1.3000 were last seen since October. This pair does feel as though it is being resilient and whilst there may be a retracement over the next week or so, it does feel as though we are in for some GBPUSD strength in the medium to long term. The EU are starting to become a little nasty the closer we get to Brexit, and I am left wondering if the EU are starting to get desperate. A key level to watch in the new week will be 1.2950, the bulls will need to find some support there if they are to make further inroads into this pair.
The USDCAD finally managed to break its 10 day losing streak late on Friday evening. The oil prices enjoyed a much needed reprieve from its recent slump and the CAD fought back by over 100 pips, there is that inevitable bounce to come this week, but I will be watching levels to see where the sellers start to lean. The levels to watch for me is 1.3700 – 1.3750, I will be looking for reasons to sell.
With the event risk of the French Presidential Election on Sunday, there will be no weekly ranges as there are sure to be some big gaps – as we saw 2 weeks ago. Macron is the overwhelming favourite, and I am sure a lot of this has been priced in. I learnt from 2016 that I will not take any vote for certain, a shock Le Pen win will see the EUR come under some massive pressure next week.
It’s been a tough time for technical traders of late, and I hope that we are one week closer to normal market conditions.
