Yesterday the markets felt as though we had a front seat at the Australian Open as FX price action went back and forth just like a tennis rally. Much of this was created by the EU and the internal struggle developing between President Draghi and the Germans – who seem to be overly concerned about inflation. On the other side of the rally was the possibility of forex traders looking to square positions ahead of the Trump inauguration this evening.
Dean's Daily FX Update – 20 January 2017
In the Zone
- GBPUSD
- AUDUSD
- NZDUSD
- USDCAD
Noteworthy News
- George Soros had some disparaging things to say around Donald Trump, and the President Elect continues to split the US down the middle. Tonight will be his first test and I suspect the whole world will be glues to their screens.
Recap
Donald Trump’s choice as Secretary of the Treasury, Stephen Mnuchin, had his first taste of what was to come last night – and for the most part he was impressive. He did mention the need for a strong dollar in the long term and was not afraid to suggest that China have manipulated their currency in the past.
The EURUSD was the big mover yesterday as the silver tongue of Draghi moved the EUR from 1.0670 all the way down to 1.0580 where it found immediate support and rallied back to close on 1.0700 – I suspect this was on the back of traders squaring off their positions ahead of the US inauguration. I suspect that 1.0700 may prove to be a hurdle too strong to break for now.
The USDJPY was driven largely by the bond market yesterday which also experienced a bit of a see-saw day. The pair did get all the way up to 155.50 resistance, before it gave most of those gains back. On the surface it does look as though there is more chance of test back to 113.25 in the future but the event risk this evening may not allow this to materialize.
GBPUSD staged a nice recovery yesterday and looks set to test recent highs again at 1.2415, I am still really cautious trading this pair given both the event risk of Donald Trump and the nature of Brexit. I do think that the pair looks primed to weaken somewhat this morning, but I continue to sit this pair out.
I am looking forward to the inauguration speech of Donald Trump this evening and I suspect that it may create some opportunity on Monday.
Daily Ranges 20/01/2017
Majors
EURUSD
Resistance 1.0690 – 1.0714
Support 1.0625 – 1.0605
GBPUSD
Resistance 1.2390 – 1.2415
Support 1.2250 – 1.2228
AUDUSD
Resistance 0.7580 – 0.7590
Support 0.7520 – 0.7500
NZDUSD
Resistance 0.7200 – 0.7220
Support 0.7140 – 0.7120
USDCAD
Resistance 1.3300 – 1.3320
Support 1.3220 – 1.3200
USDJPY
Resistance 115.10 – 115.30
Support 114.00 – 113.80
USDCHF
Resistance 1.0080 – 1.0100
Support 1.0020 – 1.0000
Rand
USDZAR
Resistance 13.6350 – 13.6919
Support 13.5000 – 13.4585
EURZAR
Resistance 14.5000 – 14.5530
Support 14.3890 – 14.3550
GBPZAR
Resistance 16.7800 – 16.8120
Support 16.6000 – 16.5280
Minors
AUDCAD
Resistance 1.0056 – 1.0080
Support 0.9972 – 0.9950
AUDJPY
Resistance 86.75 – 87.06
Support 86.10 – 86.00
EURCHF
Resistance 1.0730 – 1.0740
Support 1.0710 – 1.0700
EURGBP
Resistance 0.8690 – 0.8700
Support 0.8617 – 0.8600
EURJPY
Resistance 122.40 – 122.65
Support 121.60 – 121.40
GBPJPY
Resistance 141.70 – 142.00
Support 140.30 – 139.60
GBPCAD
Resistance 1.6420 – 1.6447
Support 1.6266 – 1.6210
GBPCHF
Resistance 1.2440 – 1.2460
Support 1.2330 – 1.2310
Indices
DE30
Resistance 11620 – 11660
Support 11550 – 11530
UK100
Resistance 7240 – 7260
Support 7200 – 7180
US500
Resistance 2270 – 2300
Support 2260 – 2220
US30
Resistance 19800 – 19850
Support 19700 – 19600
SA40
Resistance 46800 – 47000
Support 46000 – 45800
Commodities
BRENT
Resistance 55.60 – 55.80
Support 54.17 – 53.80
XAUUSD
Resistance 1212.09 – 1220.00
Support 1195.00 – 1190.20
XAGUSD
Resistance 17.15 – 17.30
Support 16.90 – 16.80
Important Economic Data out today
- 11:30 GBP Retail Sales
- 15:30 CAD CPI
- 16:00 USD Fed Member Harker Speaks
- Tentative USD President Elect Trump Speaks
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