The dollar did pause for breath against our preferred pair yesterday and the Aussie made some gains. It is still on Dean’s radar for today after a bit of a weak session in Asia. We also have the ZAR in focus. Many of the big investment banks are positioning for a ratings down grade and calling the USDZAR back towards 16.
Dean's Daily FX Update – 22 November 2016
In the Zone
- AUDUSD
- USDZAR
Recap
We were hoping for the greenback to take a little bit of a breather this week ahead of the Thanksgiving holiday, and were rewarded for our patience, albeit in a moderate fashion. Other major currencies seemed a little subdued, perhaps nervous to take on the mighty Dollar, and so very few took full advantage of the situation. The only one that attempted a major wash out was cable, but chatter around the market is that it was due to a rather large order that traded through the market.
The EURUSD started the day off in fine fashion, even news of Merkel running for another term was well received, and the region is in desperate need of some continuity of leadership. Enter ECB President Draghi and the EUR gave back all of its gains, his speech did give one the sense that there may some form of QE extension in December and this was the catalyst for EUR to go offered. It did bounce in the New York session but now seems to be somewhat range bound.
Likewise, the USDJPY attempted to trade lower and did have a look at 110.51, we did mention this level to watch yesterday and that is exactly where it found support. There was a better than expected US bond auction, and coupled with US equities reaching all-time highs, the pairs gave away everything. I still believe that 111.35 is going to be a tough level to break and would not be surprised if we see another attempt lower today.
GBPUSD started the say in a slow methodical manner but burst into life late afternoon, there is chatter that there was a big order in the GBPJPY what traded through the market and this was the catalyst for the cable. Either way it traded higher by over 100 pips in the matter of 5 minutes, I am curious to see if the pair is able to build on the momentum this morning. An interesting side note to this is that the GBP is the only currency that is stronger against the USD since the election.
The much followed OPEC headlines is driving both the oil prices and in turn the USDCAD, as oil traded higher by 4% so the CAD was able to wrestle some initiative back from the USD as it traded lower to below 1.3400. This pair will be led by oil prices for now.
The big news last night was that the S&P 500 trading at all-time highs, and this capped the USD losses, I suspect that it may find some resistance today and in turn could allow the major currencies to make further inroads against the USD.
Daily FX Ranges
EURUSD
Resistance 1.0660 – 1.0675
Support 1.0587 – 1.0570
GBPUSD
Resistance 1.2470 – 1.2500
Support 1.2395 – 1.2370
AUDUSD
Resistance 0.7400 – 0.7440
Support 0.7353 – 0.7340
NZDUSD
Resistance 0.7080 – 0.7100
Support 0.7035 – 0.7015
USDCAD
Resistance 1.3465 – 1.3490
Support 1.3385 – 1.3365
USDJPY
Resistance 111.00 – 111.30
Support 110.30 – 109.88
USDCHF
Resistance 1.0107 – 1.0130
Support 1.0050 – 1.0015
USDZAR
Resistance 14.3500 – 14.4200
Support 14.0500 – 13.9700
Important Economic Data out today
- 15:30 CAD Retail Sales
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