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21 August 2017- Dean Forex Market Commentary

21 Aug
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21 August 2017- Dean Forex Market Commentary

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Dean’s Daily FX Update – 21 August 2017

In the Zone

  • AUDUSD
  • USDCAD
  • USDZAR
  • GOLD
  • SILVER
  • OIL

Noteworthy News

  • After the dismissal of Steve Bannon on Friday, all eyes will be on the new Chief Strategist in the White House.

Recap

US politics has been begging for some radical change for some time now, and on Friday we could have seen the first signs of that as chief strategist Steve Bannon was given his marching orders. There has been so many “false starts” of late so I am hesitant to say this is a new dawn, I suspect it is yet another dismissal that tries to hide the short comings of President Trump.

The dollar did attempt to make a “come back” against the major pairs as the USDJPY bounced off an important support level of 108.50 and marched 100 pips higher. The real test will be this morning though, the news come late on Friday afternoon and the Asian Pacific session were not in the market. I am eager to see how the market reacts this week.

The market seems eager to trade cable at the moment but there are too many red flags for me to trade the GBPUSD, the pair did show some life in the early session in London but it fell through support and traded as low as 1.2830 before bouncing. I am hesitant to look for further upside and the fact that sterling is not able to make any significant gains when the greenback is clearly in a dismal state raises the alarm for me.

Oil enjoyed its largest one day gain since November 2016 and this was the initial catalyst for the bid in CAD. A stronger than expected CPI report sparked a further bid and in a flash, the USDCAD was trading as low as 1.2565. The inflation report was not as strong as what the currency move suggests and while I will be keeping an eye on the equity market, this is the pair that I will be most keenly be looking for opportunity.

Keep an eye out for the afternoon video that tries to tie everything together.

Important Economic Data out today

14:30                                     CAD                                       Wholesale Sales

Consensus:                         0.6%

Effect:                                   Actual higher than expected is good for the CAD

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