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21 September 2017- Dean Forex Market Commentary

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Dean's Daily FX Update – 21 September 2017

In the Zone

  • GBPUSD
  • AUDUSD
  • USDJPY
  • USDZAR
  • Oil

Noteworthy News

  • Talk that Obama had wire tapped the Trump administration could lead to a further investigation, US politics is in a mess right now.

Recap

The day focussed on the FOMC yesterday, I was expecting a subdued meeting considering the hurricane disaster this year. The Fed somewhat surprised the market with dot plot showing very high expectation for another interest rate hike this year, the market had clearly spent most of the day selling the greenback and so was caught wrong footed – and immediately looked to cover the short positions. The Fed has spent the last couple of weeks trying to prep the market for no hike and so I am a little wary of last night, I wouldn’t be surprised if Fed members start back tracking a little bit next week.

The USDJPY jumped from 111.25 to 112.50 in a quick move, this leaves me at a crossroads in that this is a level that I had highlighted yesterday. It started finding some resistance there meaning that there were some brave souls building offers at this level considering the BOJ meet this morning. I will still keep an eye on this break or make level, if it drifts lower I will be looking to catch the short, whilst a break higher leaves me walking away from the trade.

The GBPUSD was the next big trade yesterday, the pair had originally traded at 1.3650 before finishing closer to 1.3500. Technically, it still looks like a good short trade although there seems to be a little hesitancy up there, perhaps a little burst higher will lend itself to more attractive entries and so a look at 1.3600 may be on the cards.

I will be keeping an eye on a lot of the pairs this morning, but I suspect that we may get more direction in New York this afternoon. The next move will invariably come from the dollar and with a tax reform on the horizon, this dollar could very well get stronger.

Important Economic Data out today

08:30                                     JPY                                         BOJ Press Conference

Consensus:                         None

Effect:                                   More hawkish than expected is good for the JPY

 

14:30                                     USD                                       Unemployment Claims

Consensus:                         302K

Effect:                                   Actual lower than expected is good for the USD

 

15:30                                     EUR                                        ECB President Draghi Speaks

Consensus:                         None

Effect:                                   More hawkish than expected is good for the EUR

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