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22 June 2017 – Dean Forex Market Commentary

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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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