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Dean's Daily FX Update – 11 August 2017
In the Zone
- EURUSD
- USDJPY
- GOLD
- ALSI
Noteworthy News
- Donald Trump over the wires last night stating that his recent comments over North Korea were not tough enough, I don’t see how this is not going to escalate into war.
Recap
Yesterday was about risk aversion and so as we highlighted yesterday, the opportunity may be in the equity markets as investors would have fled to safe haven assets. The US equity markets endured its second worst day of the calendar year and the equity bourses followed suit. Geopolitical events continue to muddy the markets today and this is evident in that the market is somewhat confused today the dollar looks poised to have a mixed day today.
The highlight for me were comments from various players in the US trying to cool the comments made by President Trump, only for Trump himself to become even more bullish. His comments are starting to draw parallel to those of Harry Truman before the bombing of Hiroshima, we have two very head strong leaders in the US and North Korea and you somehow get the feeling that conflict could be inevitable.
There is a positive correlation between the equity markets and the USDJPY and we saw the pair spiral downwards and break support at 109.20 and 109.00, we highlighted yesterday that at 108.80 could be interesting. I maintain this view today as this level will form a triple bottom stretching back to April and I believe that buyers will start leaning against this level.
I maintain my some strategy in oil and this week has translated in intraday opportunities in both oil and USDCAD, we have a big day on the economic calendar today. After all the talk about inflation over the last couple of months, we get a CPI reading that if stronger than expected could lead the dollar to run today.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
14:30 USD CPI
Consensus: 0.2%
Effect: Actual higher than expected is good for the USD
14:30 USD Core CPI
Consensus: 0.2%
Effect: Actual higher than expected is good for the USD
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