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24 August 2017- Dean Forex Market Commentary

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Dean's Daily FX Update – 24 August 2017

In the Zone

  • GBPUSD
  • GOLD

Noteworthy News

  • The majority Senate leader on the wires yesterday insisting that Trump is pushing for shared agendas. I find this doubtful and a sign for me that the President is losing leadership, perhaps he is pre-empting that the Republican Senate are turning their backs on him.

Recap

Another lacklustre day yesterday and I get the distinct feeling that the market is now waiting for the Jackson Hole Summit to begin today. There may be some short term comments that move the market today, but I suspect that any major moves will only come tomorrow as both Fed Chair Yellen and ECB Draghi speak tomorrow. Economic data came in mixed during the New York session, but it wasn’t high grade data to come out and so the market largely ignored the market.

Trump followed his campaign like speech on Tuesday night with something a little lower key yesterday. He refrained from blaming the media and the “swamp” for his own short comings and tried hard to keep his ego in check by largely sticking to the script. He did continue to look for funding for the now infamous “wall,” and even went as far to threaten a government shut down if he doesn’t get the funding. It is interesting to notice that the market are starting to ignore his comments which should be raising the alarm bell for Trump, I would not be surprised to see his own party turn their backs on him soon. You do get the feeling that if there is not drastic action soon, he will lose the Senate in voting next year.

The GBPUSD is proving somewhat of an anomaly this month as the pair remains under pressure, most of yesterday’s damage was done on the crosses and in particular the EURGBP. The Draghi speech did cause some short term gains yesterday, but the majority of that move was seen in the EURGBP as the pair broke through major resistance. The pair looks to bursting at the seams and it raining divergence as the pair looks to correct, a correct here will lead the GBPUSD to rally today. I am looking for the pair to attempt a test of 1.2830 today.

We have highlighted the 0.7200 as a key level to watch in the NZDUSD, and yesterday we had the first test of that as it traded to 0.7195 before the bounce. I have been banging my drum over this pair for the last 3 months that in my opinion this is the pair that could open up after summer, I continue to watch that stubborn support at 0.7200 as a break of that pair will target 0.6815 in the coming months.

Keep an eye out for the afternoon video that tries to tie everything together.

Important Economic Data out today

10:30                                     GBP                                       Second Estimate GDP

Consensus:                         0.3%

Effect:                                   Actual higher than expected is good for the GBP

 

14:30                                     USD                                        Unemployment Claims

Consensus:                         237K

Effect:                                   Actual less than expected is good for the USD

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