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Dean's Daily FX Update – 21 April 2017
In the Zone
- EURUSD
- GBPUSD
- USDCAD
- USDZAR
Noteworthy News
- A brief outline of the proposed tax reforms out of the White House was met with the usual Donald Trump reactions – completely split. There are some good points in the reform, but I am not sure it is too much better than the current format.
Recap
Trading continues to be dominated by fundamental trading opportunities, not a great time for technical traders like myself. It can sometimes be difficult to practice the patience that is needed, but at the end of the day that is the greatest gift a trader can have – something that I am still working on. We have some pretty large event risk on the form of the French Elections this Sunday and judging by the effect that the polls are having, I would be hesitant to be holding a position over the weekend.
The EURUSD did a full roundtrip yesterday, I am happy though that our resistance level near the 50% fib and 200 day MA held as price reversed at 1.0790. The real reason that price found such sharp resistance is on the back of news of tax cuts out of the White House and the initial gains on the day were wiped out. If you are going to trade this pair today, then please make sure that you use a guaranteed stop if possible, there is the chance that there may be some wild gap opens on Sunday evening – so take care.
The USDJPY made some fresh highs yesterday as there was a run on stops at around 109.00 and the pair ran all the way to 109.50. Predictably traders faded this move lower but comments from BOJ Governor Kuroda meant that the pair traded higher still, the pair closed the evening at 109.25. This is the middle of the range but I think that sellers may start taking short positions in this pair ahead of the European event risk this weekend.
The commodity currencies are trading in the middle of the ranges and will be dictated by the gold price over the weekend. The USDZAR looks an interesting one, it has clearly benefitted by the Turkish election last week as investors have gone overweight SA bonds in their EM portfolios, we are sitting at a pivotal level as we have Fibonacci and support level confluence. I am undecided as this pair will be affected by the gold price this weekend which in turn will be driven by elections in France.
As I mentioned in the morning video, I am going to sit the day out today and come back in on Tuesday. For those of you trading today, take care – this weekend could be a volatile one.
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