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Dean's Daily FX Update – 16 June 2017
In the Zone
- AUDUSD
- NZDUSD
- USDCAD
Noteworthy News
- EU officials on the wires stating that Brexit negotiations will start on Monday, this could mean a volatile open next week for both the GBP and EUR.
Recap
Despite the weak equity markets, the dollar was able to move higher against most currencies yesterday as the hawkish comments out of the Fed provided support for a battered and bruised dollar. The big news yesterday was out of the UK as the BOE left rates unchanged but they did note there were 3 dissenters as opposed to only the 1 last time round. The press conference was cancelled at late notice and so the market could not get the confirmation it was after, the GBP did manage to strengthen significantly against all pairs.
This news meant that the GBPUSD had to endure yet another roller coaster ride yesterday, the BOE “shock” took attention away from terribly weak retail data and the pair traded through 1.2770 which has been a swing high for the past 12 months. We ended the day below this level and this makes this pair a little bit more bearish, I would look for price to drift towards the 100 hour MA at 1.2730. If price closes the week below this level then the sellers could start licking their lips for next week.
The USDJPY was able to get a nice amount of momentum behind it as it traded higher and higher throughout the day. From a technical standpoint it was able to trade above the 200 day MA at 110.55, and the first level of support is now trading at 110.80. We saw that the BOJ kept rates on hold this morning which would have been a great sight for the dollar bulls. The first target will naturally be 111.30 and as long as the pair can close above 110.80, the bulls will remain firmly in charge.
The EURUSD spent most of the month trading between 1.1161 and 1.1284, the pair squeezed higher to test 1.1290 on Wednesday morning and yesterday the pair managed to trade lower than 1.1161 – both boundaries broken in the week. The pair got as low as 1.1125 yesterday and today I will look to see if 1.1160 -1.1170 has changed polarity and become resistance. If we do find some strong resistance here, then the next support level only comes in at 1.1100 – 1.1070.
The USDCAD is an interesting trade at the moment, the surprise hawkish comments out of the BOC led this pair lower for most of the week and all the Fed has done is to slow the momentum. We are currently trading at 1.3240 and the CAD is getting led by a stronger oil price. A close below 1.3210 would be a bearish signal, the bulls will find first resistance at 1.3300.
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