We saw the release of the FOMC meeting minutes last night. It looks more and more likely we will get a rate hike in December from the US Fed. We have seen a lot more volatility come back into the FOREX markets and this should present opportunities for us. Dean is focusing on possible shorts in USDCAD and longs in AUDUSD.
Dean's Daily FX Update – 13 October 2016
In the Zone
- AUDUSD
- USDCAD
Noteworthy News
- The release of the FOMC Meeting Minutes revealed that the September meeting was closer to hiking than we thought. It is becoming clear that a hike this year is inevitable with the Fed Funds Rate now pricing in a December hike at close to 70% probability.
Recap
We noted yesterday that GBPUSD rallied around 200 pips in the Asian session alone and that we watching how momentum would hold off in afternoon trading. Although Theresa May tried to cool the fires with parliaments say on Brexit it later emerged that “no party will have the right of veto on Brexit or to trigger Article 50.” That comment alone meant that cable surrendered a lot of its gains. I expect to see some range bound trading until we find clarity but am still bearish on this pair.
The EURUSD continued its march lower after we broke through our triangle formation, we traded through my weekly range which means that I will walk away from this pair for now. I suspect that we may find some support at 1.1000 but a break of that trend line opens the door for a test of 1.0925.
USDJPY is still finding a lot of sellers at 104.40 with continued tests of that resistance level, this morning the pair came crashing down after testing that level again. I think that we could have another test of that level today – the bulls will want to see a close above that level before we have another surge upwards.
The NZDUSD was still hovering around the 0.7055, there is some support around here and we could see a bounce. I am hesitant though, the past week this pair feels as though a boa constrictor is slowly squeezing the air out of this forex pair.
I suspect that the USDZAR could be volatile for the near future, the pair had a sharp recovery off the news that Fin Minister Gordhan can ask a review of the charges against him. The currency is just too prone for wild swings on comments for me to even contemplate taking a position.
Daily Ranges
EURUSD
Resistance 1.1063 – 1.1075
Support 1.1010 – 1.0980
GBPUSD
Resistance 1.2270 – 1.2300
Support 1.2159 – 1.2100
AUDUSD
Resistance 0.7577 – 0.7891
Support 0.7538 – 0.7510
NZDUSD
Resistance 0.7085 – 0.7100
Support 0.7042 – 0.7025
USDCAD
Resistance 1.3280 – 1.3300
Support 1.3220 – 1.3200
USDJPY
Resistance 104.20 – 104.47
Support 103.58 – 103.40
USDCHF
Resistance 0.9897 – 0.9912
Support 0.9865 – 0.9850
USDZAR
Resistance 14.3960 – 14.4700
Support 14.1500 – 14.1200
Important Economic Data out today
- 14:30 USD Unemployment Claims
- 17:00 USD Crude Oil Inventories
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