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Yesterday was another rollercoaster ride for the greenback, buyers and sellers spent most of the morning sparring with one another, and it was not until the New York session did the excitement begin. The USD was put firmly on the back foot by weak US economic data, and the fact that Trump has moved his tax plan further down the pecking order does not fill the forex market with confidence.
Dean's Daily FX Update – 28 February 2017
In the Zone
- GBPUSD
- USDCAD
- USDZAR
Noteworthy News
- Trump is starting to get a dose of reality, Mexico stated yesterday that if the US place tariffs on trade – they would simply walk away from NAFTA. This is really going to put Trump in a corner and his reaction to this will dictate how other world leaders handle Trump.
Recap
It wasn’t long before the market put those concerns behind them and staged a decent rally to close at the best levels of the day. It would seem that the market, for now, is giving President Trump the benefit of the doubt. Today we have event risk in the form of President Trump addressing Congress for the first time since taking office, it could be a telling day as the Democrats could push Trump for answers and put him under some pressure. As a result of this, I prefer to sit the day out and rather look for opportunity later in the week.
As expected, the EURUSD launched another assault on that 1.0620 level, and once again it was met with a chorus of sellers. With every fail of this level, stronger resistance forms and I suspect that the sellers will lean against this level until we see a sustained break. I would expect another attempt at 1.0620 over the course of the week, on the lower side, support comes in at 1.0530.
The USDJPY had a brief attempt lower than the magical 112.00 level before it found support on the dollar bid and closed the day at 112.90 during the afternoon. Trump did start dropping hints that he wanted to start major infrastructure spending which will not only affect bond yields but also the JPY. I suspect that the JPY may have another test at 112.00 this morning and reaction at this level will be key today.
The commodity currencies with the AUDUSD and NZDUSD in particular continue to trade in the middle of its range. I prefer to wait on these pairs to trade closer to their weekly extremes before I look at trading either pair.
Liquidity may start to dry up mid-morning as the market eagerly awaits the address to Congress this evening, the market will be trying to determine the time lines on his campaign promise deliveries. Trump has promised to outline in more detail the reductions in tax and regulations, increased infrastructure and law enforcement spending. The risk is that he will pivot this address on Obamacare and military spending which will leave the market disappointed.
Daily Ranges 28/02/2017
Majors
EURUSD
Resistance 1.0600 – 1.0620
Support 1.0540 – 1.0520
GBPUSD
Resistance 1.2470 – 1.2490
Support 1.2400 – 1.2350
AUDUSD
Resistance 0.7690 – 0.7700
Support 0.7660 – 0.7640
NZDUSD
Resistance 0.7210 – 0.7230
Support 0.7160 – 0.7140
USDCAD
Resistance 1.3170 – 1.3200
Support 1.3110 – 1.3090
USDJPY
Resistance 112.60 – 112.80
Support 112.00 – 111.60
USDCHF
Resistance 1.0090 – 1.0100
Support 1.0050 – 1.0030
Rand
USDZAR
Resistance 12.9920 – 13.0330
Support 12.9020 – 12.8670
EURZAR
Resistance 13.7690 – 13.7980
Support 13.6495 – 13.6120
GBPZAR
Resistance 16.1850 – 16.2070
Support 16.0450 – 16.0160
Minors
AUDCAD
Resistance 1.0120 – 1.0140
Support 1.0060 – 1.0040
AUDJPY
Resistance 86.70 – 87.00
Support 86.00 – 85.80
EURCHF
Resistance 1.0670 – 1.0690
Support 1.0630 – 1.0610
EURGBP
Resistance 0.8530 – 0.8560
Support 0.8465 – 0.8450
EURJPY
Resistance 119.20 – 119.40
Support 118.40 – 118.10
GBPJPY
Resistance 140.20 – 140.50
Support 139.20 – 139.00
GBPCAD
Resistance 1.6390 – 1.6420
Support 1.6270 – 1.6250
GBPCHF
Resistance 1.2575 – 1.2590
Support 1.2500 – 1.2480
Indices
DE30
Resistance 11880 – 11910
Support 11780 – 11750
UK100
Resistance 7270 – 7300
Support 7240 – 7220
US500
Resistance 2360 – 2390
Support 2340 – 2320
US30
Resistance 20800 – 20850
Support 20700 – 20650
SA40
Resistance 45100 – 45300
Support 44200 – 44000
Commodities
BRENT
Resistance 56.70 – 57.00
Support 55.90 – 55.50
XAUUSD
Resistance 1250.00 – 1270.00
Support 1235.00 – 1225.00
XAGUSD
Resistance 18.20 – 18.50
Support 17.70 – 17.50
Important Economic Data out today
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