It seems as though the current US government are intent on running the US on their own terms with very little regard to anything else, or the effect that the global markets could experience. What we did see this week though, through the lifting of Trumps travel ban, is that there are enough “checks and balances” to counter anything too absurd. There is no doubt that President Trump will fight this with all the tools at his disposal as he tries to deliver on his campaign promises. I just wonder how long it will be before his own party starts vetoing some of his proposed policies.
Over on the side of the pond, we are seeing more political developments around Brexit, PM Theresa May has indicated that she would like to trigger article 50 by the end of March, and it seems as though she may very well get her wish. Casting an eye over to the EU, it seems as though they may have a bigger fight than Brexit on their hands in 2017 – if we thought that the US election was bizarre last year, every indication is that the French election is going to be even wilder. On a local front, we only have to have a look at the State of the Nation this past week, it seems as though the world is changing at a more rapid pace than we thought possible.
This week was dominated by the US dollar strengthening against most the major pairs. After President Trump sent out a tweet last week that he would prefer a weaker dollar sent the greenback spiralling downwards, he delivered another tweet this week about the “phenomenal” tax plans that he is going to introduce – and this sent the dollar hurtling stronger! I sometimes wonder if he even knows the volatility that he is creating, and I also wonder how much of it is intentional.
The EURUSD has found a nice range forming between 1.0800 and 1.0650 over the last two weeks, it did trade slightly lower on Friday but had recovered within range by the close. I would like to see this range break before I am tempted to get into this pair, I suspect that the bias will be for the USD to strengthen and this pair to trade lower.
The GBPUSD is in a very similar position as the EUR and has formed a nice range between 1.2650 and 1.2350. It finished the week in the middle of that range, around 1.2450, I don’t see any obvious reason for this pair to trade outside of that range for now, but it is always at risk to trade around Brexit headlines. It is for this reason that I continue to sit this pair out and would prefer to trade other opportunities until have clarity on Brexit.
The USDJPY is always the toughest pair to read in volatile times. The positive sentiment around talks between Abe and Trump initially sent the pair higher, but it wasn’t long before the pair traded lower on Trumps comments around currency devaluation. The week ended with record highs in the US equities and of course this meant that the pair closed higher. From a technical view, I would have expected this pair to have another look at 112.00 next week, but geo political factors this weekend around the nuclear missiles that North Korea fired could scupper these plans. I am not going to trade any JPY pairs on Monday or until we have clarity around these developments.
The oil price was already relatively strong, and then the we saw a block buster Canadian jobs report, this allowed the USDCAD to trade lower by over 100 pips in no time. The pair bounced at previous support around 1.3075 and closed the day at 1.3100, I am looking for another test of 1.3075 and if it fails to break, I will look to go long in this pair.
The AUDUSD was the exception to the rule this week, we experienced some hawkish comments out of the RBA and this allowed the AUD to strengthen for most of the week. I suspect that we may get another push higher in the early part of the week, but I will be looking to fade this move later on in the week.
The good news is that there are opportunities brewing in this market, we just have to be prepared to work for them. I continue to trade cautiously as we get through Trumps first 100 days, after which I am hoping we will experience less market moving headlines.
Weekly Ranges 03/02/2017 – 17/02/2017
Majors
EURUSD
Resistance 1.0750 – 1.0800
Support 1.0650 – 1.0600
GBPUSD
Resistance 1.2600 – 1.2640
Support 1.2400 – 1.2370
AUDUSD
Resistance 0.7679 – 0.7700
Support 0.7570 – 0.7550
NZDUSD
Resistance 0.7300 – 0.7330
Support 0.7190 – 0.7165
USDCAD
Resistance 1.3210 – 1.3240
Support 1.3057 – 1.3040
USDJPY
Resistance 113.60 – 113.85
Support 112.20 – 111.90
USDCHF
Resistance 1.0020 – 1.0040
Support 0.9920 – 0.9890
Rand
USDZAR
Resistance 13.4990 – 13.5295
Support 13.2828 – 13.2560
EURZAR
Resistance 14.3850 – 14.4340
Support 14.1000 – 14.0000
GBPZAR
Resistance 16.8570 – 16.9000
Support 16.5890 – 16.5570
Minors
AUDCAD
Resistance 1.0072 – 1.0100
Support 0.9940 – 0.9920
AUDJPY
Resistance 86.85 – 87.00
Support 85.48 – 85.22
EURCHF
Resistance 1.0690 – 1.0710
Support 1.0640 – 1.0610
EURGBP
Resistance 0.8630 – 0.8660
Support 0.8495 – 0.8470
EURJPY
Resistance 121.30 – 121.60
Support 120.00 – 119.80
GBPJPY
Resistance 142.20 – 142.50
Support 140.00 – 139.77
GBPCAD
Resistance 1.6528 – 1.6560
Support 1.6270 – 1.6245
GBPCHF
Resistance 1.2500 – 1.2525
Support 1.2387 – 1.2370
Indices
DE30
Resistance 11700 – 11750
Support 11550 – 11500
UK100
Resistance 7280 – 7300
Support 7150 – 7120
US500
Resistance 2340 – 2370
Support 2280 – 2240
US30
Resistance 20260 – 20309
Support 19950 – 19900
SA40
Resistance 46400 – 46800
Support 45500 – 45100
Commodities
BRENT
Resistance 56.80 – 57.00
Support 55.20 – 55.00
XAUUSD
Resistance 1235 – 1246.00
Support 1200.00 – 1185.20
XAGUSD
Resistance 17.80 – 17.99
Support 17.30 – 17.10
