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Dean's Daily FX Update – 24 May 2017
In the Zone
- EURUSD
- AUDUSD
- NZDUSD
- USDCAD
- USDCHF
Noteworthy News
- The UK has lifted their threat level from severe to critical, which means that an attack may be imminent. It also means that armed forces may be deployed at public events, you do get the impression that this is a passive policy.
Recap
We managed to see a late bounce in the dollar last night, I am asking the same question that I asked on Thursday last week – is this a “dead cat bounce” or is it the start of a dollar recovery? From where I sit the former is the most likely scenario, although this morning will be very telling – this move just has the same feeling as last week. I will admit that momentum is definitely slowing but the catalyst for the dollar run is a feeling that the US political cloud will lift and that the Fed will hike rates in June.
The market interpreted this from the bond and equity markets, we saw a sell-off in Treasuries which is a sign that safe haven flows are reversing. I do believe that the US political cloud will lift, President Trump has stuck to the script thus far in the Middle East and I do believe that the Democrats and Republicans will learn to work together. As far as the June rate hike – I am not convinced by this just yet.
The EURUSD traded down to 1.1183 from 1.1225 as part of the broad dollar move yesterday, and 1.1180 will be the big level to watch this morning. We do have event risk this afternoon but if the sellers are to gain any traction, there will need to be a sustained break below this pivotal level.
The USDJPY was trading near 111.10 as US traders got their desks after a morning of range bound trading. The pair did manage to trade as high as 111.90. Momentum is starting to fade a little bit here and I suspect that 112.00 may be a level where sellers may start building offers.
Often on days where we have so much event risk, I see if there are other pairs that I may trade against each other. Remember most pairs are derived with the dollar as the common denominator, I will then just look for the weakest currency and trade it against the strongest currency. On my radar this morning is the AUDNZD.
Daily Ranges 24/05/2017
Majors
EURUSD
Resistance 1.1230 – 1.1250
Support 1.1180 – 1.1160
GBPUSD
Resistance 1.2990 – 1.3010
Support 1.2950 – 1.2930
AUDUSD
Resistance 0.7490 – 0.7520
Support 0.7450 – 0.7430
NZDUSD
Resistance 0.7030 – 0.7040
Support 0.6970 – 0.6950
USDCAD
Resistance 1.3520 – 1.3540
Support 1.3480 – 1.3460
USDJPY
Resistance 111.90 – 112.20
Support 111.20 – 111.00
USDCHF
Resistance 0.9750 – 0.9770
Support 0.9700 – 0.9690
Rand
USDZAR
Resistance 13.2350 – 13.2900
Support 13.0000 – 12.9550
EURZAR
Resistance 14.8050 – 14.8500
Support 14.5040 – 14.4500
GBPZAR
Resistance 17.1780 – 17.2060
Support 16.9060 – 16.8560
Minors
AUDCAD
Resistance 1.0110 – 1.0140
Support 1.0060 – 1.0040
AUDJPY
Resistance 83.50 – 83.70
Support 83.00 – 82.80
EURCHF
Resistance 1.0930 – 1.0940
Support 1.0900 – 1.0880
EURGBP
Resistance 0.8660 – 0.8680
Support 0.8600 – 0.8580
EURJPY
Resistance 125.20 – 125.50
Support 124.35 – 124.00
GBPJPY
Resistance 145.40 – 145.70
Support 144.20 – 144.00
GBPCAD
Resistance 1.7570 – 1.7600
Support 1.7490 – 1.7460
GBPCHF
Resistance 1.2660 – 1.2680
Support 1.2620 – 1.2600
Indices
DE30
Resistance 12680 – 12700
Support 12550 – 12520
UK100
Resistance
Support
US500
Resistance 2390 – 2410
Support 2360 – 2340
US30
Resistance 20870 – 20900
Support 20700 – 20680
SA40
Resistance 48400 – 48700
Support 47800 – 47600
Commodities
BRENT
Resistance 54.40 – 54.60
Support 53.40 – 53.10
XAUUSD
Resistance 1250.00 – 1270.00
Support 1240.00 – 1220.00
XAGUSD
Resistance 17.10 – 17.30
Support 16.80 – 16.60
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