Today I am going to start in a different direction, if it has gone unnoticed I want to draw your attention to the US Equity bourses – they are continuing to run, and run hard. Similar to what we saw post the US election results, we are seeing the “Trump effect” on the market. Perhaps you are keeping an eye on the bond market and noticed that these too are seeing a strong run higher. Talk in the media is that this is on the back of the changes that are sweeping through Washington.
Dean's Daily FX Update – 26 January 2017
In the Zone
- NZDUSD
- USDCAD
- USDZAR
Noteworthy News
- President Trump did remark that the US need to help Mexico to have a healthy economy. Those comments may seem conciliatory, but he did follow that by signing orders to reform immigration and the building of a border wall! Is Donald delivering?
Recap
The reason I bring your attention to this is purely because President Trump has not even begun to tell us how he intends to deliver on his market promises of tax cuts and less regulation. When he does, these markets could see a further run, inflation to rise sharply and will force the Fed to raise interest rates quicker than expected – and this will in turn be the catalyst for a dollar run.
As it stands, the dollar was weaker yesterday – against all pairs – and that is perhaps why we are seeing a quiet Donald Trump. My guess here suggests to me that the market is starting to doubt if Trump can deliver on his promises, he has discounted that the rest of the world govern themselves and negotiating all these trade deals will be tougher than he thought – he also needs to realize that a stronger dollar will be a drag on the economy in the long run. Let us rather concentrate on the technical clues however.
The EURUSD has been in a tight range of late, there is clear support at 1.0720 which is also the 100 hour MA, and whilst this support is battling to break – the top side resistance at 1.0780 is equally tough to break. One of these levels needs to break to get the direction that we are looking for.
The USDJPY has stalled on multiple attempts this week at the 200 hour MA which trades at 114.00, yesterday it traded to 113.88. Despite the higher equity market and interest rates – which put pressure on the JPY – these resistance levels are still holding. If this level holds again in the coming days, the sellers will be in a confident mood to take this pair lower.
The GBPUSD moved above the 100 day MA at 1.2535, the significance of this is that it is the first close above this level since June 2016 – the Brexit referendum. It continues to build a head of steam and I suspect that 1.2800 will be the next major resistance level. There are too many fundamental headlines that are driving this pair and so I continue to sit on the side lines in cable.
We cover the commodity pairs in more detail in the morning video.
Daily Ranges 26/01/2017
Majors
EURUSD
Resistance 1.0750 – 1.0775
Support 1.0700 – 1.0670
GBPUSD
Resistance 1.2660 – 1.2700
Support 1.2530 – 1.2500
AUDUSD
Resistance 0.7580 – 0.7600
Support 0.7530 – 0.7510
NZDUSD
Resistance 0.7290 – 0.7300
Support 0.7230 – 0.7200
USDCAD
Resistance 1.3142 – 1.3160
Support 1.3070 – 1.3050
USDJPY
Resistance 113.90 – 114.10
Support 112.80 – 112.50
USDCHF
Resistance 1.0020 – 1.0030
Support 0.9960 – 0.9945
Rand
USDZAR
Resistance 13.3562 – 13.4180
Support 13.2450 – 13.2050
EURZAR
Resistance 14.3350 – 14.3680
Support 14.1900 – 14.1500
GBPZAR
Resistance 16.8050 – 16.8420
Support 16.6570 – 16.6000
Minors
AUDCAD
Resistance 0.9950 – 0.9960
Support 0.9872 – 0.9860
AUDJPY
Resistance 86.05 – 86.40
Support 85.50 – 85.30
EURCHF
Resistance 1.0740 – 1.0770
Support 1.0710 – 1.0700
EURGBP
Resistance 0.8560 – 0.8600
Support 0.8470 – 0.8440
EURJPY
Resistance 122.07 – 122.25
Support 121.40 – 121.20
GBPJPY
Resistance 143.90 – 144.00
Support 142.20 – 142.00
GBPCAD
Resistance 1.6530 – 1.6560
Support 1.6440 – 1.6420
GBPCHF
Resistance 1.2650 – 1.2670
Support 1.2530 – 1.2500
Indices
DE30
Resistance 11850 – 11890
Support 11700 – 11650
UK100
Resistance 7210 – 7230
Support 7140 – 7100
US500
Resistance 2300 – 2320
Support 2280 – 2260
US30
Resistance 20130 – 20160
Support 19900 – 20000
SA40
Resistance 47000 – 47300
Support 46600 – 46300
Commodities
BRENT
Resistance 55.80 – 56.00
Support 54.20 – 54.00
XAUUSD
Resistance 1205.09 – 1207.00
Support 1190.00 – 1180.20
XAGUSD
Resistance 17.15 – 17.30
Support 16.70 – 16.50
In the Zone
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