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Dean's Daily FX Update – 26 May 2017
In the Zone
- EURUSD
- NZDUSD
- USDCHF
- Gold
Noteworthy News
- The SARB left the interest rates on hold yesterday, this weekend is potentially a market mover for the USDZAR. There are rumours that the NEC may recall Zuma and there are also rumours that S&P may improve their outlook on South Africa next week.
Recap
With the exception of oil and USDCAD where OPEC meeting meant there was a lot of volatility in the pairs, the rest of the market was somewhat subdued. Today will see the start of the G7 meetings and I suspect that just like the NATO meetings yesterdays, the rest of the world will seek assurances from President Trump that he is committed to his allies. We have already seen how quickly he has changed his stance on the majority of his campaign promises and so these G7 members would probably heed caution anyway, we have already seen yesterday that the UK stopped sharing intelligence with the US over the Manchester bombings – this is a direct response to the Trump controversy last week and does not put the US in a position of strength.
The EURUSD traded in a tight range yesterday, the low trading at 1.1190 with a high of 1.1225. Comments out of the EU were not able to move this pair, I have noticed that ECB President Draghi is speaking on Monday again – it seems as though he is speaking every week these days. We saw from his speech this week, that the more the ECB address the market, the less relevance he will have. The bulls must be a little nervous that we have not been able to continue moving higher and I suspect that we may see some profit taking this afternoon.
Cable finally moved to trade at the bottom of its recent range, at 1.2925. The GDP data was the catalyst for this move, there are a lot of traders that are happy to play the range and build bids at these levels. I am no certain, I would be cautious this morning as I believe that this pair could break through the lower end of that range today and trade closer to 1.2850. The logic behind my belief is simple, the Labour Party are now only a mere 5 points behind the Conservative Party in the latest polls – remember that if the Conservatives don’t have a convincing win, there could be some tough Brexit negotiations in store.
The drop in oil prices meant that the loonie lost a lot of its recent gains yesterday, the oil price lost close on $ 3.00 dollars yesterday and so the fact that the USDCAD only gave up 75 pips could probably be seen as a small victory. This bounce in the pair was probably on the cards, but price has starting stalling at 1.3475 – 1.3490, the buyers will have to push higher today if they want to maintain the momentum, I suspect though that sellers could build offers at these levels this morning.
There is a bank holiday in both the UK and the US on Monday and so today could be rather subdued leading into what will probably be an extremely quiet Monday.
Daily Ranges 26/05/2017
Majors
EURUSD
Resistance 1.1230 – 1.1250
Support 1.1180 – 1.1160
GBPUSD
Resistance 1.2960 – 1.2980
Support 1.2850 – 1.2830
AUDUSD
Resistance 0.7470 – 0.7490
Support 0.7430 – 0.7400
NZDUSD
Resistance 0.7040 – 0.7050
Support 0.7000 – 0.6980
USDCAD
Resistance 1.3480 – 1.3500
Support 1.3400 – 1.3370
USDJPY
Resistance 111.90 – 112.20
Support 111.40 – 111.20
USDCHF
Resistance 0.9750 – 0.9770
Support 0.9700 – 0.9690
Rand
USDZAR
Resistance 13.0000 – 13.0350
Support 12.8500 – 12.8150
EURZAR
Resistance 14.5750 – 14.6000
Support 14.2140 – 14.1500
GBPZAR
Resistance 16.8280 – 16.8560
Support 16.6060 – 16.5560
Minors
AUDCAD
Resistance 1.0090 – 1.0110
Support 1.0030 – 1.0010
AUDJPY
Resistance 83.50 – 83.70
Support 82.50 – 82.30
EURCHF
Resistance 1.0930 – 1.0940
Support 1.0900 – 1.0880
EURGBP
Resistance 0.8700 – 0.8720
Support 0.8600 – 0.8580
EURJPY
Resistance 125.40 – 125.60
Support 124.75 – 124.50
GBPJPY
Resistance 144.80 – 145.00
Support 143.00 – 142.80
GBPCAD
Resistance 1.7490 – 1.7520
Support 1.7300 – 1.7270
GBPCHF
Resistance 1.2740 – 1.2760
Support 1.2510 – 1.2480
Indices
DE30
Resistance 12680 – 12700
Support 12550 – 12520
UK100
Resistance
Support
US500
Resistance 2415 – 2430
Support 2390 – 2380
US30
Resistance 21100 – 21200
Support 20900 – 20870
SA40
Resistance 48000 – 48200
Support 47600 – 47300
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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