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Dean's Daily FX Update – 22 June 2017
In the Zone
- AUDUSD
- NZDUSD
- USDCAD
Noteworthy News
- The finance minister of Mexico was on the wires last night hinting that Mexico could start cutting interest rates by next year. This is an emerging market and often we see similar trends in South Africa, a widening interest rate cycle to that of the US could bring pressure on the EM currencies.
Recap
The economic calendar may have been light but finally we have some lift off in the commodity pairs as the dollar finally started fighting back. There have been some more talking heads and the story sounds like a broken record with all thus far sounding a little bit more cautious than what Yellen was last week. This type of chatter had brought the dollar under a little bit of pressure in the last week, but I think the market is starting to move on from this news now – it may be cautious, but at least they hiking, it is a far cry from where the other economies are at present.
The EURUSD hovered around 1.1140 for most of the morning session before the buyers moved the pair back to 1.1168. Some say the sellers had their chance at 1.1130 and blew it, but the buyers also stuttered at 1.1165. This is the exact range that we highlighted yesterday, I still think that the bias is still towards the pair trading below the floor and testing 1.1100.
The highlight of the Queens speech was that PM May did concede that she would be forced to move away from a hard Brexit. Cable rallied on that comment and we saw a test of 1.2700 early on, the gloss faded relatively quickly though as the pair traded back towards 1.2635 but GBP was still the top performer on the day. We are fast starting to form a downward trend line and the top is trading at 1.2765, I still believe that sterling could come under some pressure.
The USDCAD was a loser today, the fall out of oil is starting to have an effect on the loonie and the pair traded as high as 1.3350 before finding some resistance. This level was a weekly high and also above the 200 day MA, the buyers will want to see the pair trade higher. I mentioned last week that the sudden hawkish stance of the BOC raised some flags for me, in addition to the oil price we also saw signs yesterday that the housing market is starting to soften up – and this could bring some pressure to the CAD in the short term.
The NZDUSD was the pair that I have been watching for the most part this week, and we were offered a chance to short the pair. As expected, the RBNZ left the rates on hold and with no accompanying press conference the pair did not get the dovish tone that I am sure Governor Wheeler would have desired and the pair traded as high as 0.7270. I suspect that today those gains will be erased and I will be looking for the pair to dip below 0.7200.
Our strategies are starting to take shape now which is encouraging going forward, don’t you just love it when a plan comes together.
Daily Ranges 22/06/2017
Majors
EURUSD
Resistance 1.1160 – 1.1170
Support 1.1110 – 1.1100
GBPUSD
Resistance 1.2690 – 1.2710
Support 1.2600 – 1.2580
AUDUSD
Resistance 0.7570 – 0.7580
Support 0.7540 – 0.7520
NZDUSD
Resistance 0.7250 – 0.7260
Support 0.7210 – 0.7180
USDCAD
Resistance 1.3330 – 1.3350
Support 1.3230 – 1.3210
USDJPY
Resistance 111.60 – 111.80
Support 111.00 – 110.70
USDCHF
Resistance 0.9750 – 0.9770
Support 0.9700 – 0.9680
Rand
USDZAR
Resistance 13.1000 – 13.1500
Support 12.9500 – 12.9000
EURZAR
Resistance 14.5940 – 14.6200
Support 14.4540 – 14.4000
GBPZAR
Resistance 16.5580 – 16.6060
Support 16.4550 – 16.4000
Minors
AUDCAD
Resistance 1.0070 – 1.0090
Support 1.0020 – 1.0010
AUDJPY
Resistance 84.30 – 84.50
Support 83.60 – 83.40
EURCHF
Resistance 1.0870 – 1.0880
Support 1.0850 – 1.0830
EURGBP
Resistance 0.8820 – 0.8850
Support 0.8760 – 0.8740
EURJPY
Resistance 124.30 – 124.50
Support 123.80 – 123.60
GBPJPY
Resistance 141.56 – 141.70
Support 140.00 – 139.80
GBPCAD
Resistance 1.6880 – 1.6900
Support 1.6760 – 1.6740
GBPCHF
Resistance 1.2350 – 1.2360
Support 1.2280 – 1.2260
Indices
DE30
Resistance 12870 – 12890
Support 12720 – 12700
UK100
Resistance 7510 – 7530
Support 7430 – 7410
US500
Resistance 2440 – 2460
Support 2420 – 2400
US30
Resistance 21490 – 21520
Support 21390 – 21360
SA40
Resistance
Support
Commodities
BRENT
Resistance 46.30 – 46.50
Support 44.80 – 44.50
XAUUSD
Resistance 1245 – 1255
Support 1240 – 1230
XAGUSD
Resistance 16.50 – 16.60
Support 16.30 – 16.20
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