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Dean's Daily FX Update – 22 August 2017
In the Zone
- EURUSD
- AUDUSD
- USDCAD
- GOLD
- SILVER
- OIL
Noteworthy News
- The Republican party are turning their attention to the new tax brackets, there is also talk of bi-partisan talks, which is pretty eye catching to me. The Republicans need to get this tax reform through.
Recap
I was expecting a very quiet day with it being what I like to call a “wash out” Monday, but the truth is that the market was relatively busy and the dollar once again came under some big pressure. The dollar was extremely weak in the early US session but then seemed to stabilize in the late evening and starting grinding its way back into the game – perhaps the US trader only started working in earnest once the American solar eclipse had passed.
The EURUSD was the major benefactor as the pair traded in a 100 pip range, which considering that we are in summer is an impressive move. The EUR seemed somewhat lacklustre for most of the day, but once New York opened, the pair went bid and we had a steady climb to 1.1830 before slipping back to 1.1809. The level to watch this morning is 1.1800, this was resistance yesterday and so I suspect that we will test this level again this morning, a break back lower target 1.1760 – 1.1730.
I am also keeping an eye on the USDCAD this morning, as it does seem as though there is something brewing in the loonie. There has been a strong correlation between the pair and oil of late, and despite the oil price falling by 2.5% yesterday the CAD strengthened. This will put more emphasis on the economic data out of Canada this afternoon as I wonder if the market is pricing in some better than expected news today? I am watching the psychological level of 1.2500 to see if we have any bids building there to look for long trades.
There is a continuing evidence of cracks forming in the Chinese property market, I am watching this carefully as it will have a negative effect in the AUDUSD. There is also evidence that iron ore prices as well as other mettle prices are coming under pressure, this pair could also be setting up to tumble and I would like to be a part of that trade.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
14:30 CAD Retails Sales
Consensus: 0.0%
Effect: Actual higher than expected is good for the CAD
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