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Dean's Daily FX Update – 23 October 2017
In the Zone
- EURUSD
- AUDUSD
- NZDUSD
- USDCAD
Noteworthy News
- Brexit talks between the UK and the EU are currently at a stalemate, it seems as though the EU are trying to call Britain’s bluff. I actually don’t think that the UK were trying to bluff and so I would not be surprised if there is no deal at the end.
Recap
After a good couple of weeks where we have been afforded the luxury of being able to focus on only one or two pairs, this does not mean that we can take our eye off the ball though. There was plenty of both fundamental and geo political event risk to monitor this weekend. We saw reports that Spain will now look to impose direct rule over Catalonia, Abe looks to have won the Japanese elections and you cannot ignore that we could have a new Fed Chairman in the coming days.
The big mover on Friday was the USDCAD, last month the BOC confirmed that any future interest rate movement would be data dependent. The weak retail sales report suggests that we will not see a hike next month and as a result, the USDCAD moved higher from 1.2480 to 1.2620. The initial resistance at 1.2580 was broken, I will look at 1.2600 as the first level to watch today and will look to fade this move if it breaks lower.
The USDJPY will be a tricky pair to trade today, the relentless move in stocks will have an obvious effect as will the bond market as probability of US tax cuts grow. On the back of this the USDJPY has broken through resistance at 113.40, the natural resistance level is at 113.60 but I am cautious this morning as there is bound to be some movement on the back of the Japanese elections. The fact that Abe wins the election should be market friendly, one hand the USDJPY should trade lower on news that the status quo remains – the status quo however is lower rates which should mean JPY weakness.
I will be keeping an eye on the NZDUSD today though, there was a big move lower on the coalition government – I am of the opinion that this move may be slightly overdone. I will be watching 0.6950 with some interest as this is where I believe buyers will start building bids, some consolidation here will lead me to join these bids.
Important Economic Data out today
Nothing of significance
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