Yesterday was characterised by a quieter day for headlines. The US seems to be at logger heads around the travel ban and Donald Trump is overly consumed by this. For the most part the greenback (USD) did continue with its stronger theme, although the momentum is clearly slowing down. The technical levels are starting to hold which fills me with slightly more confidence that trading patterns are starting to shift from fundamental patterns back to technical.
Dean's Daily FX Update – 08 February 2017
In the Zone
- EURUSD
- USDCAD
- USDCHF
- USDZAR
Noteworthy News
- News out of the BOE that higher inflation could mean interest rate hikes came as a bit of a surprise to the market considering Brexit. Reinforces for me why I am not keen to trade GBPUSD at this moment.
Recap
The EURUSD was not able to hold support at 1.0700 which for me would have been a bullish signal, price broke lower but was able to find support at 1.0650. The rally from here did find some momentum but stalled just above 1.0700, at the risk of being redundant, this level will now become resistance and the bulls will have to break and close above 1.0700 to wrestle back the initiative. On the lower side, buyers are clearly building some support at 1.0650.
Cable was a wild ride yesterday, it went into the New York session as the weakest currency in the market but ended the day as the strongest. From a technical analysis aspect, we had price move down to 1.2340 which was the 50% fib, and price immediately found support and traded as high as 1.2550. From a fundamental aspect, there were comments out of the BOE that indicated we could be in for more hawkish tones this year which also gave some support to the GBPUSD. Today could be a tricky one, but I suspect that we could trade in a 1.2550 – 1.2450 range today.
In many ways we got exactly what we were hoping for in the USDJPY as per the morning video yesterday. The pair managed to break through 112.00 and the selling continued to 111.50, this was the 38.2% fib and the pair immediately found some support. I did want the pair to re-test and fail at 112.00, I was really hoping that sellers would lean against that level but the pair closed at 112.30. This morning means that 112.00 again becomes a key battle ground where buyers and sellers will meet, and price reaction at these levels will be key.
The AUDUSD and the NZDUSD had an up and down trading day, one gets the impression that the market started treading water ahead of the event risk this week. Later this evening we have interest rate decisions from the RBNZ and then early tomorrow morning both the RBNZ Governor and RBA Governor will be holding press conferences. It is for the reason that I will sit these pairs out and rather wait for Monday.
Daily Ranges 08/02/2017
Majors
EURUSD
Resistance 1.0730 – 1.0750
Support 1.0650 – 1.0620
GBPUSD
Resistance 1.2560 – 1.2580
Support 1.2430 – 1.2410
AUDUSD
Resistance 0.7680 – 0.7700
Support 0.7600 – 0.7580
NZDUSD
Resistance 0.7355 – 0.7370
Support 0.7290 – 0.7270
USDCAD
Resistance 1.3190 – 1.3220
Support 1.3085 – 1.3070
USDJPY
Resistance 112.60 – 112.80
Support 111.50 – 111.20
USDCHF
Resistance 0.9980 – 0.9999
Support 0.9930 – 0.9900
Rand
USDZAR
Resistance 13.4430 – 13.4890
Support 13.3100 – 13.2830
EURZAR
Resistance 14.3630 – 14.4050
Support 14.2520 – 14.2370
GBPZAR
Resistance 16.8000 – 16.8430
Support 16.5670 – 16.5250
Minors
AUDCAD
Resistance 1.0050 – 1.0070
Support 0.9970 – 0.9950
AUDJPY
Resistance 85.90 – 86.10
Support 85.20 – 85.00
EURCHF
Resistance 1.0680 – 1.0700
Support 1.0640 – 1.0620
EURGBP
Resistance 0.8630 – 0.8660
Support 0.8570 – 0.8520
EURJPY
Resistance 120.70 – 121.00
Support 119.50 – 119.00
GBPJPY
Resistance 140.70 – 141.00
Support 139.00 – 138.70
GBPCAD
Resistance 1.6460 – 1.6490
Support 1.6290 – 1.6270
GBPCHF
Resistance 1.2460 – 1.2490
Support 1.2377 – 1.2350
Indices
DE30
Resistance 11580 – 11620
Support 11499 – 11470
UK100
Resistance 7190 – 7220
Support 7150 – 7120
US500
Resistance 2300 – 2320
Support 2280 – 2240
US30
Resistance 20110 – 20130
Support 20300 – 19900
SA40
Resistance 46400 – 46600
Support 45500 – 45300
Commodities
BRENT
Resistance 55.80 – 56.00
Support 54.60 – 54.40
XAUUSD
Resistance 1235.00 – 1250.00
Support 1215.00 – 1200.20
XAGUSD
Resistance 17.60 – 17.80
Support 17.40 – 17.20
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