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28 July 2017 – Dean Forex Market Commentary

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Dean's Daily FX Update – 28 July 2017

In the Zone

All

Recap

There was a lot of economic data that came out the US yesterday and they were all impressive, coupled with a quiet day in Washington it allowed the greenback to experience a strong rally as it strengthened against all of the pairs. It really seems that the world is fixated on politics and the only conclusion that I can come to is that Donald Trump is the President and that he is not going anywhere for the next 4 years. Despite all the scandal, his approval ratings are as strong as they were last year, the “establishment” attitude towards him reinforces his campaign references and in the eyes of the man in the street makes him the underdog.

The Asian and London session continued the dollar sell off yesterday and the EURUSD reached a high of 1.1775, the pair immediately found some resistance and drifted back towards 1.1711. As soon as New York entered the market the pair was loitering around major support, but it needed just a nudge to trade below the 100 hour MA at 1.1650. The pair may have bounced back to 1.1680 by the close, but the failure of the pair to break through 1.1711 and 1.1735 is very telling to me, the current levels will be key to watch as if it holds we will be looking at 1.1711 again, but a failure could see a test of 1.1615 by tonight which coincide with levels before the FOMC.

The USDJPY continues to be whipped around by the US equity markets, the pair broker through major levels in the form of the 100 hour MA and 100 day MA but failed to break the 200 hour MA at 111.65. The sharp move lower coincided with the NASDAQ tumbling lower. The sellers will want the pair to stay below the 100 hour MA at 111.25 to remain in control and the next targets will be come 110.80 to 110.60.

The USDCAD was finally able to break above the 100 hour MA at 1.2504 after a couple of weeks of selling, this is a pair that I am on the side-lines as I don’t want to be the one searching for the bottom. The pair closed the day trading at 1.2550 which is a risk defining level, the pair has not been able to close above 1.2560 for over a month, and the bulls will want to trigger stops above this level before it has a look higher today.

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

Important Economic Data out today

14:30                                     CAD                                       GDP

Consensus:                         0.2%

Effect:                                   Actual higher than expected is good for the CAD

 

14:30                                     USD                                       Advance GDP

Consensus:                         2.5%

Effect:                                   Actual lower than expected is good for the USD

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