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18 October 2017- Dean Forex Market Commentary

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Dean's Daily FX Update – 18 October 2017

In the Zone

  • EURUSD
  • GBPUSD
  • Gold

Noteworthy News

  • Cryptocurrencies are all the rage at the moment, in my opinion it is a little bit of mania. Trading things like bitcoin at the moment has nothing to do with fundamentals or technical at this moment, it is all on sentiment. I get the feeling that this may be the next major bubble – anyone remember subprime?

Recap

There were a lot of talking heads coming out of the Fed yesterday and the overwhelming message is that they seem to have an open mind when it comes to further rate hikes and they are becoming increasingly confident that we will get above the 2% inflation target. The focus in the New York session was around the new NAFTA proposals by the US which were swiftly rejected by both Mexico and Canada, this did lead to some early weakening but it wasn’t long before both recovered.

The USDJPY continues to find support at the 100 hour MA at 112.15, there is tight resistance at 112.35 though which also happens to be the 200 hour MA. The pair did fail at this resistance and the pair is trading in this tight range, the 112.25 will be the key level to watch today and will likely dictate which side of this range we break.

We were able to come out on top in the USDCAD yesterday as the pair completed a round trip for the week. The pair has based off the 200 hour MA at 1.2510 of late and this is where the pair bounced from and peaked yesterday at 1.2590 before trading all the way back to support. We are trading once again near that lower level at 1.2500 again and this is where we will once again look for a break, a move lower will give the bears further impetus to continue the momentum.

I do think that there is some opportunity brewing this morning, but will wait for ECB President Draghi comments to end before focusing more.

Important Economic Data out today

  • 10:10 EUR ECB President Draghi Speaks

Consensus: None

Effect: More hawkish than expected is good for the EUR

  • 10:30 GBP Average Earnings Index 

Consensus: 2.1%

Effect: Actual higher than expected is good for the GBP

  • 14:30 USD Building Permits 

Consensus: 1.25M

Effect: Actual higher than expected is good for the USD

  • 16:30 USD Crude Oil Inventories 

Consensus: -4.7M

Effect: No consistent effect on the USD

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