The USD got a big “bid” on Friday afternoon and we saw it rally against most other currencies. This action has continued into this morning and Dean examines some of the reasons and where he expects the Forex markets to move this week. Still some talk of the Fed hiking rates but this seems unlikely before the election in November. Also, the BOJ is talking of devaluing the Yen so these may be themes that dominate the week’s trading.
Dean's Daily FX Update – 22 August 2016
In the EURUSD, Dean expects to see a continuation of the move that started on Friday. He also caveats this with the potential of a small bounce because the move may be overdone in the Asia session which does not always follow through.
The AUDUSD broke through the previous support level at 0.7628 and we have now bounced back to just below that level. Have we seen a fake-out or will the previous support level become resistance for this FX pair? The stochastics are heavily oversold, MACD at the waterline so we may get some retaliation from Friday’s move.
Very similar action in the NZDUSD.
The Loonie (USDCAD) has retreated for slightly different reasons and this is due to the strong correlation to the oil price. Oil seemed to top out at $51 per barrel after some talk of the OPEC countries increasing supply that has halted its move upwards.
Dean is starting to question whether comments out of the Bank of Japan over the weekend will have the desired response in the Yen. Has the 100.66 level now become resistance and could we see further strengthening of the Yen against the dollar?
High Risk Investment Warning: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. Before deciding to trade the products offered by BlackStone Futures you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. BlackStone Futures provides general advice that does not take into account your objectives, financial situation or needs. The content of this Website must not be construed as personal advice. BlackStone Futures recommends you seek advice from a separate financial advisor. Please take the time to read our Risk Disclosure Notice.
