Dean has so many forex pairs he is watching today that it is hard to know where to start. President Elect, Trump met with Obama yesterday and started to spell out some of his policy thoughts. Looks business and bank friendly but may be not so to his closest trading partners.
Dean's Daily FX Update – 11 November 2016
In the Zone
- EURUSD
- USDCAD
- UDJPY
- USDCHF
- USDZAR
Noteworthy News
- Donald Trump confirmed that he will dismantle Dodd Frank, this means that regulations on Banks will be lightened. Trading desks will be able to take more risk, it will also increase liquidity.
- President Zuma was able to skirt a no confidence vote, this is not going to go away and he is going to be under a microscope from here in. This may mean he comes completely ineffectual as a leader and pressure may become too severe.
Recap
Donald Trump becoming President has certainly put a firecracker under the greenback, as the market mulls through his potential policies, he definitely seems to be very market friendly and determined to improve on domestic growth.
A by-product of this is that cable has also able to find a new lease of life, with the GBP stronger by well over 1% against all pairs. A number of reasons have been mooted for this such as value and a possible new trade deal with the USA – President Obama famously said, “the UK will be at the back of the que in trade deals with the United States,” with the Republicans in office this no longer seems the case. My opinion is that Brexit is no longer the ugly step child of the world, the US have also voted for change and there is talk of this spreading in the coming the years – perhaps the market is starting to accept this change?
For all its glory GBPUSD has not yet reached the 1.2600 levels, this is where the pair was trading before the flash crash. The lows after the Brexit referendum was at 1.2791, I would like to see a close above those levels before I contemplate trading this pair – the signs are encouraging though.
The USDJPY saw a lot of unbundling yesterday as the pair tested that 107.00 level, we were unable to breach through that level and it is for this reason that I am going to monitor this level with a keen eye. I am cautious in the “safe-haven” currencies like EURUSD, USDJPY and USDCHF, but I do think there may be some value forming.
Both the AUDUSD and NZDUSD have been flushed out this week and both pairs have drifted into their weekly ranges, both bottomed and found some nice support which suggests to me that the market is comfortable buying at the bottom. The USDCAD is my favoured pair today, it has been weighed down by Trump wanting to change the terms of NAFTA – this is one policy that I don’t think his party will let him get away with. Despite the holiday in the USA and Canada, BOC Governor Poloz is speaking today and I suspect he may try and assure Canada that relations with the USA are strong.
Daily FX Ranges
EURUSD
Resistance 1.0980 – 1.1000
Support 1.0900 – 1.0875
GBPUSD
Resistance 1.2560 – 1.2580
Support 1.2465 – 1.2430
AUDUSD
Resistance 0.7680 – 0.7704
Support 0.7608 – 0.7575
NZDUSD
Resistance 0.7278 – 0.7300
Support 0.7200 – 0.7182
USDCAD
Resistance 1.3480 – 1.3500
Support 1.3410 – 1.3400
USDJPY
Resistance 106.50 – 107.00
Support 105.35 – 105.05
USDCHF
Resistance 0.9860 – 0.98885
Support 0.9789 – 0.9777
USDZAR
Resistance 14.0500 – 14.1400
Support 13.7000 – 13.6000
Important Economic Data out today
- 17:00 USD Prelim Consumer Confidence
- 17:45 CAD BOC Governor Poloz Speaks
- All Day USD Public Holiday
- All Day CAD Public Holiday
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