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21 December 2016 – Dean Forex Market Commentary

21 Dec
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21 December 2016 – Dean Forex Market Commentary

Dean watching the commodity currencies for the most part today. Expect liquidity to be a little less as traders prepare for the holiday weekend so moves could be a bit exaggerated.

Dean’s Daily FX Update – 21 December 2016

 

In the Zone

  • GBPUSD
  • AUDUSD
  • NZDUSD
  • USDJPY
  • USDCHF

Noteworthy News

  • Theresa May outlined her Brexit plan to parliament yesterday, for the attempted bullying from the EU it seems as though the UK don’t care. There seems to be a mind shift happening with the EU starting to realize that a sour relationship with the UK will not be beneficial. I am watching the GBP on all this.

Recap

Another quite data day yesterday and judging by the price action, liquidity is starting to diminish a little as more desks start to empty out ahead of the holiday season. The dollar initially moved higher against all major pairs and then corrected against most pairs, typical of these trading conditions. The only real concern here is that after such a strong move in the USD over the course of last week, the moves needed a little bit more of a push for it to have a deeper correction.

The EURUSD got down as low as 1.0355 yesterday which is the lowest traded price since January 2003, the pair found some support down there and bounced to recover most of the day’s losses. This pair is very much in unchartered territory and so to me the market is trying to establish some support levels. The EURUSD is currently trading at 1.0400, although we have major resistance closer to 1.0460 I would not be surprised if 1.0400 becomes a defining level today and we have another attempt at 1.0365. I don’t believe that the bottom has been identified in this pair yet and I will sit this pair out until we have a clearly defined bottom.

The USDJPY after such a strong day on Monday gave a lot back yesterday, in the London session this pair traded all the way to 118.06. We discussed that 118.50 seems to be the line in the sand for the market and sellers would lean against that level – that seemed the case yesterday as the market traded at the high for a lot of the day before giving way to the downside. The pair is currently trading at 117.60 which for me is a level which will define the bulls from the bears – I am hoping for the pair to trade lower and test support at 116.55.

The NZDUSD seemed to have found a bottom yesterday as it found some nice support at 0.6907, but it found some resistance at 0.6930. This pair is really poised at the minute and the market will be looking for reason to sell, I am still looking for support to hold and for the kiwi to have a run it will need to hold MA support between 0.6910 and 0.6900 to convince the buyers.

The CAD was the star performer yesterday as market respected both major resistance and the 61.8% daily fib level. The catalyst for the correction was extremely strong economic data, the USDCAD did trade as high as 1.3430 before price moved down to 1.3355 which is where the 200 hour MA level is currently. This will be the key defining level this morning – a candle close below this level will indicate a bearish signal.

Daily Ranges 21/12/2016

Majors

EURUSD

Resistance                                        1.0410 – 1.0427

Support                                             1.0365 – 1.0350

GBPUSD

Resistance                                        1.2390 – 1.2430

Support                                             1.2320 – 1.2310

AUDUSD

Resistance                                        0.7294 – 0.7309

Support                                             0.7239 – 0.7205

NZDUSD

Resistance                                        0.6955 – 0.7000

Support                                             0.6900 – 0.6880

USDCAD

Resistance                                        1.3400 – 1.3425

Support                                             1.3340 – 1.3310

USDJPY

Resistance                                        118.22 – 118.50

Support                                             116.90 – 116.65

USDCHF

Resistance                                        1.0300 – 1.0315

Support                                             1.0230 – 1.0200

Rand

USDZAR

Resistance                                        14.0785 – 14.1210

Support                                             13.9340 – 13.8527

EURZAR

Resistance                                        14.6193 – 14.6619

Support                                             14.4100 – 14.3740

GBPZAR

Resistance                                        17.3623 – 17.4116

Support                                             17.1750 – 17.0680

Minors

AUDCAD

Resistance                                        0.9729 – 0.9748

Support                                             0.9680 – 0.9660

AUDJPY

Resistance                                        85.68 – 85.93

Support                                             84.96 – 84.63

EURCHF

Resistance                                        1.0699 – 1.0706

Support                                             1.0678 – 1.0645

EURGBP

Resistance                                        0.8422 – 0.8433

Support                                             0.8377 – 0.8368

EURJPY

Resistance                                        122.40 – 122.81

Support                                             121.90 – 121.42

GBPJPY

Resistance                                        146.06 – 146.28

Support                                             145.09 – 144.70

GBPCAD

Resistance                                        1.6585 – 1.6617

Support                                             1.6490 – 1.6460

GBPCHF

Resistance                                        1.2740 – 1.2755

Support                                             1.2690 – 1.2677

CADCHF

Resistance                                        0.7701 – 0.7710

Support                                             0.7660 – 0.7645

Indices

DE30

Resistance                                        11473 – 11500

Support                                             11300 – 11280

UK100

Resistance                                        7032 – 7047

Support                                             6976 – 6950

US500

Resistance                                        2270 – 2300

Support                                             2264 – 2256

US30

Resistance                                        19980 – 20000

Support                                             19900 – 19850

SA40

Resistance                                        44600 – 44700

Support                                             43800 – 43600

Commodities

BRENT

Resistance                                        55.92 – 56.09

Support                                             54.80 – 54.50

XAUUSD

Resistance                                        1138.00 – 1141.11

Support                                             1128.10 – 1122.75

XAGUSD

Resistance                                        16.17 – 16.28

Support                                             15.80 – 15.63

Important Economic Data out today

  • 17:30                    USD                      Crude Oil Inventories
  • 23:45                    NZD                      GDP

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