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Dean's Daily FX Update – 14 August 2017
In the Zone
- EURUSD
- USDJPY
- USDCAD
- GOLD
- Silver
- ALSI
Noteworthy News
- Donald Trump seems to be in some sort of mood after comments over the weekend that he is now considering military action in Venezuela. Another geopolitical story to keep an eye on.
Recap
Despite the looming crisis in North Korea, the market had its attention tuned into the CPI data read on Friday. We should be expecting that inflation is not going to shoot the lights out in the near future and so this showed on Friday as the number was a tad on the light side. This was the initial catalyst for the dollar to weaken substantially, we then heard comments on the wire that Russia and China have a plan B to solve the crisis in North Korea and this immediately saw the dollar surge higher. I have to be honest, I believe that with both leaders in the US and North Korea releasing such provoking statements last week that the efforts of China are something too little too late.
North Korea will be seen as a bit of a laughing stock if they don’t attack Guam after their repeated threats, and the US will be seen as a rather soft super power if they don’t deal with it thanks to Trumps statements. In fairness, Trump did suggest to China 6 months ago that this could be in control and I suspect that their negligence to do anything could come back to bite them.
The USDJPY continued to trade lower on Friday and the pair traded as low as 108.70, this is an area we highlighted for most of the week as an area of interest. There is two major support levels in this area and a clear triple bottom formation building, I expect buyers to start building bids at these levels. On the top side, I expect that sellers will start eyeing the 109.40 area as a level to start looking for selling opportunities.
The USDCAD had and up and down week and like oil it presented 3 or 4 nice low risk day trading opportunities. The pair did get to a low of 1.2652 last week and that should be immediate support and an area where I would like to see price bounce. On the top side, I would be looking for offers to start building at around 1.2740.
GBPUSD also had an eventful week just above the 100 hour MA at 1.3000 which is a psychological area of interest. It is also a defining bullish/bearish level this week – if price is to trade higher then I would expect the pair to run a little higher and vice versa. The initial run this morning will dictate the move for the rest of the week.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
Nothing of Significance
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