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Dean's Daily FX Update – 23 August 2017
In the Zone
- GBPUSD
- USDCAD
- GOLD
Noteworthy News
- China has called on the US to immediately lift the sanctions it placed on some companies yesterday, stating that it could affect bilateral cooperation. China has been pretty ineffective in the Korean peninsula and their cooperation has been virtually nil up to now – I expect the US to tell China to go get knotted.
Recap
We were able to catch the wave yesterday morning and ride it for over 200 pips – what a great day for a week like this! The dollar finally saw some reprieve yesterday as it marched higher on talk of the impending tax reform. This is also brought some cheer to the stock market as the US equities were able to close above major support and resistance levels.
The EURUSD felt the “double whammy” as weaker data out of Germany came out a lot weaker than expected and the with strong equity market correlation, the USDJPY raced higher on the day. The weakest currency on the day yesterday was the NZDUSD, this a currency that I have long been short on and we find ourselves once again testing major support at 0.7220 this morning. I will be watching this level with a key eye as if price action trades lower than this level then it opens up a test closer to 0.6850.
The only major pair that I am looking trade this morning is the GBPUSD, cable has had a dreadful month thus far, as Brexit concerns continue to weigh on Sterling. This last week has seen major bearish technical levels broken and the market has been searching for reasons to look for long opportunities. This move seems to be slightly overdone, we have diverging on the 4H chart and I am also seeing some support and the 61.8% fib on the Daily chart – multiple reasons for me to look for a trading set up.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
09:00 EUR ECB President Draghi Speaks
Consensus: None
Effect: More hawkish than expected is good for the EUR
16:30 USD Crude Oil Inventories
Consensus: -3.3M
Effect: No consistent effect on the USD
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