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25 August 2017- Dean Forex Market Commentary

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Dean's Daily FX Update – 25 August 2017

In the Zone

  • GOLD

Noteworthy News

  • Paul Ryan ensured the public that legislation will be passed that ensures government repays debts, this is in contrast to President Trump’s comments earlier in the week. Is this the first sign that the Republicans are turning their back on Trump?

Recap

The market has been waiting on the Jackson Hole Symposium the entire week and is it got closer so the market started to get quieter as we saw pairing of positions. We have two stand out speeches today in the form of Fed Chair Yellen and ECB President Draghi, I am sure that the market will waiting on any hints around future central bank rate changes – I suspect that Yellen may hint towards another hike this year. I have been drumming on for the last 6 weeks that this weekend may be the turning point for the greenback and the technical levels do support that view – but these event risk days are usually a lottery.

The only real pair that was not range bound was the USDCAD, as the pair traded lower to test levels around 1.2500. This move was on the back of changing weather forecasts off the coast of Texas, earlier in the week it looked as though “Harvey” seemed like a minor storm but last night we saw evacuations as forecaster now see the storm hitting landfall as a category 3 Hurricane.

The oil price got weaker, the reason is that this hurricane will make landfall in an area packed with oil refineries, with no refineries to buy the oil there will be a short term over supply of WTI and so oil and gas prices will drop. The reason that the USDCAD unbundled correlation was because the storm is going to miss offshore rigs and so their product will remain unaffected. I highlighted 1.2500 in my trading plan as an area of interest and I will continue to keep an eye on this level today.

As a word of caution, the Draghi speech is scheduled to start at 21:00 meaning that it could lead into the close, consider using guaranteed stops over the weekend on open positions as there is always the chance of a gap open on Monday.

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

Important Economic Data out today

10:00                                     EUR                                        German Ifo Business Climate

Consensus:                         115

Effect:                                   Actual higher than expected is good for the EUR

 

14:30                                     USD                                        Core Durable Goods

Consensus:                         0.4%

Effect:                                   Actual higher than expected is good for the USD

 

18:00                                     USD                                        Fed Chair Yellen Speaks

Consensus:                         None

Effect:                                   More hawkish than expected is good for the USD

 

21:00                                     EUR                                         ECB President Draghi Speaks

Consensus:                         None

Effect:                                   More hawkish than expected is good for the EUR

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