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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