The Aussie followed the rules yesterday for us and has pushed higher. We are expecting a bit of a follow through as US traders lighten positions going into the Thanksgiving weekend. We also have two of the safe-haven forex pairs on our radar as they appear to be over bought.
Dean's Daily FX Update – 23 November 2016
In the Zone
- USDCHF
- USDJPY
Noteworthy News
- Donald Trump intends to fill 2 FOMC seats in his first 3 months, this could have some serious impact on the future of the rate path.
- There is chatter that Hillary Clinton is being urged to call for a recount in 3 key swing states won by Donald Trump, this would pose some political risk if it were to go anywhere.
Recap
The equity markets closed at record highs for the second consecutive day, before you get caught up in the hype though, it is prudent to acknowledge that it hasn’t exactly been moving in volume but merely buy a couple of points every night. What it has done is allowed the USD Index to creep a little higher which means that the recovery we were hoping for has been muted.
There was also a little bit of excitement at higher existing home sales yesterday which was another contributing factor for the USD to go bid. I am sceptical on this month’s data though, only because it was collected before the big move in US yields, you would think that with a probability of higher interest rates, the trend going forward will be for weaker data?
The EURUSD broke the downward trend on Monday night, it closed higher yesterday again, but by a mere 2 pips. The pair has formed a tight range which it is battling to break out of, 1.0640 and 1.0580 seem to define that range for now. 1.0612 is a big level to watch this morning, for this pair to gain a solid foothold, it will need to stay above that level.
Considering the fireworks on Monday, the GBPUSD was equally weak yesterday. At one stage cable had given back all of its gains that it had made on Monday. There was a very late rebound last night however and it is trading at 1.2410 – in my opinion the price looks a little vulnerable at these levels.
USDCAD continues to be dictated by the oil price, if the oil price gets stronger we seem to shrug off anything else. Oil does look set to take a breather ahead of next week’s OPEC meetings and this could drive the CAD weaker. For now, I would look to see how price trades at 1.3475 as it could find some resistance there.
The AUDUSD found the 100 MA at 0.7395 and the round figure of 0.7400 an incredibly tough level to pierce last night with multiple attempts at that level. We were eventually able to close above 0.7400, this morning we have seen some continuation of the AUD buyers which may give the London and US session some conviction to take this pair higher. I said on the weekend that this week could prove to be an Aussie week and we have been vindicated thus far.
Keep in mind that it is US Thanksgiving tomorrow and after an incredible 2 weeks, I am wondering if the USD bulls may take some profits off the table.
Daily FX Ranges
EURUSD
Resistance 1.0650 – 1.0675
Support 1.0595 – 1.0580
GBPUSD
Resistance 1.2483 – 1.2500
Support 1.2389 – 1.2367
AUDUSD
Resistance 0.7440 – 0.7470
Support 0.7390 – 0.7370
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 – 110.00
USDCHF
Resistance 1.0107 – 1.0130
Support 1.0074 – 1.0050
USDZAR
Resistance 14.1800 – 14.2600
Support 14.0000 – 13.9500
Important Economic Data out today
- 15:30 USD Core Durable Goods
- 15:30 USD Unemployment Claims
- 17:30 USD Crude Oil Inventories
- 21:00 USD FOMC Meeting Minutes
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