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20 September 2017- Dean Forex Market Commentary

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Dean's Daily FX Update – 20 September 2017

In the Zone

  • EURUSD
  • AUDUSD
  • USDJPY
  • USDZAR
  • Oil

Noteworthy News

  • Rumours were circulating yesterday that the tax cut could be announced soon, I would be surprised if it got released on FOMC day, but it does suggest that finally the White House administration will get something through.

Recap

The market has been eagerly waiting today’s FOMC decision, and as a result it almost trumps any other economic data on the calendar. The market will be looking for a clearer vision of balance sheet reduction program, some form of hint that there will be another interest rate hike this year and some clarity on Yellens contract. This is why there is still a risk to trade higher tonight, although I suspect the status quo is for the greenback to drift lower.

Most major pairs will drift sideways from midmorning and so it is important to keep an eye on the bigger picture. The EURUSD traded higher yesterday during the New York session, it currently trades at 1.2010 this morning, and it found resistance twice at this level and this represents the 61.8% Fibonacci level. Keep an eye on the 1.1965 level today – this is the 200 hour MA and during the Fed statement it could represent the bullish/bearish level.

The USDJPY ended the day as virtually unchanged yesterday, although there was a lot of intraday volatility. What we did see is that the pair found support at the 100 day MA at 111.12 and this level will continue to be key today. The 200 day MA at 112.18 is another key level to watch today, a break above that level during the Fed, could force the pair to trade much higher.

The Northern Hemisphere summer continues to be the most destructive in history, people in Mexico City are being urged to stay off the streets as a 7.1 magnitude earthquake ripped through the country. There is also talk that Hurricane Maria could rip through the Caribbean and Florida again, all this suggests to me that there won’t be another rate hike this year.

Important Economic Data out today

10:30                                     GBP                                       Retail Sales

Consensus:                         0.2%

Effect:                                   Actual higher than expected is good for the GBP

 

20:00                                     USD                                       Federal Funds Rate

Consensus:                         1.25%

Effect:                                   Actual higher than expected is good for the USD

 

20:00                                     USD                                       FOMC Statement

Consensus:                         None

Effect:                                   More hawkish than expected is good for the USD

 

20:00                                     USD                                       FOMC Press Conference

Consensus:                         None

Effect:                                   More hawkish than expected is good for the USD

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