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Dean's Daily FX Update – 19 May 2017
In the Zone
- EURUSD
- GBPUSD
- USDCHF
Noteworthy News
- Perhaps overshadowed by US politics, we have also seen political scandal unfold in Brazil where the President was up on bribery charges. We saw how this affected the Rand yesterday, Brazil has a similar economy and similar political vulnerabilities to South Africa. I will keep an eye on this as this could indirectly affect the Rand.
Recap
After a sharp decline this week, the greenback was bound to bounce. Although the data was the initial catalyst, a video whereby ex-FBI Director Comey stated he was not pressurised by the Justice or Attorney General that he was asked to end any investigations – this does not mean to suggest that this includes the White House, but that is how the market interpreted it. I have heard the Democrats calling for impeachment, I have said it before and I will say it again, Donald Trump is a resilient character and he always seems to have a trick up his sleeve.
Cable was the most affected by this “revelation,” as coupled with technical breaks the GBPUSD fell by over 100 pips in mere seconds. The 1.2988 level was the major floor and it obliterated this level before finally finding some support at the 100 and 200 MA levels at 1.2925. This becomes the pivotal level, my gut says that this pair will be reluctant to break its range until the June 8th election results and that this pair may drift back toward 1.3000 today.
The USDJPY was also affected by this news as it attempted to re-establish its recent pivot levels at 111.25. This will become the big level this morning, if we are able to stay above this level then 112.00 – 112.50 becomes the target. The USDJPY took a big step backwards this week and coupled with the some profit taking, I think that this is the more likely scenario.
Similar to the sterling, the EURUSD flirted with the US Election highs at 1.1170 before it found some resistance and retraced to as low as 1.1075 in mere minutes. This pair did bounce immediately though and the buyers feel more convincing than the rest of the pairs. Sellers will try and convince you that the 100 hour MA at 1.1055 is back on the cards, but it feels as though a new trend is trying to form, I suspect that that if we get that low again we may encounter some dip buyers. The more likely scenario in my eyes if for another test at 1.1170.
I was able to grab some pips yesterday and so this leaves me reviewing my strategy for this week, the market will be waiting to see if Trump can rebound from his latest blunder as the focus is now completely off policy changes. I am not too keen to be holding an open position over the weekend, Trump is going on his first overseas trip since taking office – he has shown already that he struggles to keep his ego in check, and who knows what he will reveal to his hosts.
Daily Ranges 19/05/2017
Majors
EURUSD
Resistance 1.1149 – 1.1160
Support 1.1100 – 1.1080
GBPUSD
Resistance 1.2970 – 1.3000
Support 1.2920 – 1.2900
AUDUSD
Resistance 0.7440 – 0.7470
Support 0.7400 – 0.7370
NZDUSD
Resistance 0.6930 – 0.6950
Support 0.6890 – 0.6850
USDCAD
Resistance 1.3630 – 1.3650
Support 1.3580 – 1.3560
USDJPY
Resistance 111.60 – 111.80
Support 110.60 – 110.50
USDCHF
Resistance 0.9820 – 0.9840
Support 0.9750 – 0.9730
Rand
USDZAR
Resistance 13.4200 – 13.4500
Support 13.2600 – 13.2200
EURZAR
Resistance 14.9450 – 14.9700
Support 14.7540 – 14.7200
GBPZAR
Resistance 17.4280 – 17.4560
Support 17.1860 – 17.1560
Minors
AUDCAD
Resistance 1.0130 – 1.0140
Support 1.0080 – 1.0060
AUDJPY
Resistance 82.90 – 83.10
Support 82.20 – 82.00
EURCHF
Resistance 1.0910 – 1.0930
Support 1.0870 – 1.0850
EURGBP
Resistance 0.8599 – 0.8620
Support 0.8550 – 0.8530
EURJPY
Resistance 124.20 – 124.40
Support 123.35 – 123.10
GBPJPY
Resistance 144.60 – 144.80
Support 143.70 – 143.50
GBPCAD
Resistance 1.7690 – 1.7700
Support 1.7590 – 1.7570
GBPCHF
Resistance 1.2720 – 1.2740
Support 1.2660 – 1.2640
Indices
DE30
Resistance 12650 – 12670
Support 12550 – 12520
UK100
Resistance
Support
US500
Resistance 2380 – 2400
Support 2360 – 2340
US30
Resistance 20720 – 20750
Support 20580 – 20560
SA40
Resistance 48000 – 48100
Support 47400 – 47500
Commodities
BRENT
Resistance 52.90 – 53.20
Support 51.70 – 51.50
XAUUSD
Resistance 1260.00 – 1270.00
Support 1230.00 – 1210.00
XAGUSD
Resistance 16.80 – 17.00
Support 16.50 – 16.30
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