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Dean's Daily FX Update – 19 April 2017
In what started out as a quiet day quickly turned into one of the most memorable days in the last couple of weeks. There is no point beating around the bush, the day was dominated by what unfolded in London yesterday morning. Prime Minister May called for a snap election – surprising and genius at the same time – but more on that shortly.
In the Zone
- EURUSD
- NZDUSD
- USDCHF
- USDCAD
- USDZAR
Noteworthy News
- I suspect that the snap election in the UK will prove to be a game changer, I suspect that forecasts in the GBPUSD will be considerably raised in the next couple of weeks.
Recap
The GBPUSD initially sold off on rumours of the snap election, but it proved to be a “buy the rumour, sell the fact” trade and cable quickly rebounded back to trade at multi month highs. It all culminated when stops at 1.2800 were triggered and we had a flash move above 1.2900, the pair closed at 1.2840 and it is interesting to note that this is where price was trading before the October flash crash. Of course the short trade on this pair was crowded and so we saw some profit taking, but this election has the ability to strengthen PM May position in parliament which could allow her to negotiate a “soft” Brexit, I will probably sit this pair out for the next couple of weeks.
Over the pond the US Treasury market continues to trade much higher as traders unwind the inflation trade. We highlighted last week that the USDJPY would be the benefactor of this trade and so it has unfolded, the pair was testing 109.00 as we started the week but it was not long before price was trading at 108.40 before finding familiar support. Keep an eye on the US Treasuries, if the unwind continues then USDJPY will trade lower, I get the feeling that 107.75 is the last frontier for the buyers and if we trade below that level – the floor could give way.
The EURUSD was on the ride with cable yesterday as it broke through recent resistance at 1.0670 to trade as high as 1.0730 – the strongest levels in almost a month. There will be some resistance up there and there is that temptation to start looking for shorts, the French elections over the weekend are weighing on my mind and I don’t want an open position going into the weekend. These elections will most likely go into a second round, but this has quickly become a three horse race and 2 of the contenders are offering sweeping changes in France which will have a deep impact on the EUR – on the side-lines for me.
I can’t recall the last time that technical traders had such slim pickings, and with all the fundamental plays of late – it feels as though I am running out of pairs to trade. I view this as an opportunity to cherry pick the best trades, but patience is going to be a key virtue.
Daily Ranges 19/04/2017
Majors
EURUSD
Resistance 1.0730 – 1.0750
Support 1.0660 – 1.0640
GBPUSD
Resistance 1.2840 – 1.2870
Support 1.2650 – 1.2630
AUDUSD
Resistance 0.7550 – 0.7570
Support 0.7500 – 0.7480
NZDUSD
Resistance 0.7020 – 0.7050
Support 0.6990 – 0.6970
USDCAD
Resistance 1.3400 – 1.3420
Support 1.3330 – 1.3310
USDJPY
Resistance 108.90 – 109.10
Support 108.30 – 108.00
USDCHF
Resistance 1.0020 – 1.0050
Support 0.9970 – 0.9950
Rand
USDZAR
Resistance 13.3800 – 13.4250
Support 13.2350 – 13.2070
EURZAR
Resistance 14.3170 – 14.3540
Support 14.1430 – 14.1000
GBPZAR
Resistance 17.2000 – 17.2600
Support 16.8350 – 16.8050
Minors
AUDCAD
Resistance 1.0110 – 1.0120
Support 1.0060 – 1.0050
AUDJPY
Resistance 82.30 – 82.60
Support 81.60 – 81.30
EURCHF
Resistance 1.0697 – 1.0710
Support 1.0670 – 1.0630
EURGBP
Resistance 0.8420 – 0.8450
Support 0.8340 – 0.8300
EURJPY
Resistance 116.60 – 116.90
Support 115.70 – 115.50
GBPJPY
Resistance 139.40 – 139.70
Support 137.80 – 137.60
GBPCAD
Resistance 1.7200 – 1.7220
Support 1.6910 – 1.6880
GBPCHF
Resistance 1.2780 – 1.2800
Support 1.2660 – 1.2630
Indices
DE30
Resistance 12050 – 12080
Support 12000 – 11950
UK100
Resistance 7240 – 7260
Support 7140 – 7120
US500
Resistance 2340 – 2370
Support 2330 – 2300
US30
Resistance 20520 – 20550
Support 20450 – 20400
SA40
Resistance 47300 – 47500
Support 46600 – 46400
Commodities
BRENT
Resistance 55.60 – 55.70
Support 54.70 – 54.50
XAUUSD
Resistance 1290.00 – 1300.00
Support 1270.00 – 1260.00
XAGUSD
Resistance 18.30 – 18.50
Support 18.10 – 18.00
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