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In the Zone
- EURUSD
- GBPUSD
- AUDUSD
- NZDUSD
- USDCAD
- USDZAR
Recap
The market has seemed a little jittery over the last couple of days, I suppose that you could say that it represents the eerie feeling that the world is going through at the moment. The television news stations are honed in on the 100 days performance of President Trump, I don’t really understand the significance of it as it is early in his term but the consensus is that he may have not really achieved much. This puts me on alert today – Trump clearly watches these channels and he clearly monitors what people think of him, I am not sure that his ego will allow him to avoid sending a tweet today.
ECB President Draghi was his usual conflicting self yesterday, he sent the EURUSD soaring to 1.0940 on comments that most downside risks had diminished, but then sent it crashing back down to 1.0850 after some dovish tones on inflation. The gap open this week has not closed and the market has found some resistance at 1.0900 this week, I feel that there may be another assault on 1.0920 this morning and this level will be pivotal.
Cable is still relentless at the moment, there has been some clear consolidation after last week’s news and it still looks like it could extend somewhat. Levels are currently at the pre October crash leading into local elections next week before the general election in June. The GBPUSD is already decoupling from the EUR, there may be a month end retreat today, my concern is that the market is still very short this pair and there is always the risk of some short covering.
The USDCAD continues its wild adventure, after the timber and dairy tax proposals by President Trump. It did enjoy a big retracement on news that he would not look to renegotiate NAFTA at this point, the pair though was affected by oil prices being affected by Libyan production and has reached 1.3625. This pair looks as though it has legs and so I would be cautious where we place short trades here.
There won’t be a report on Monday because of the public holiday but I will prepare a morning video as the FX markets will be open.
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