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Dean's Daily FX Update – 28 September 2017
In the Zone
- EURUSD
- AUDUSD
- USDJPY
- USDZAR
- Oil
Noteworthy News
- Talk that tax cuts will not be retroactive will further disappoint Americans – yet another broken promise by Donald Trump.
Recap
The market waited most the evening on the tax reform last night, although the equity markets jumped on the news I suspect that today will see a little bit of profit taking. I cover it extensively in the morning video, but I the reform is far from what Trump had promised in his campaign and I actually think that it is quite disappointing. Instead, it was the Bank of Canada that supplied the volatility last night, the catalyst was news that there was no inclination for the central banks next rate move – considering the hawkish talk of late, and this made the CAD the weakest currency.
The USDCAD moved above the 1.2411 level and broke through major resistance to trade at 1.2485 which was a swing level stretching back to 2016. It is important to note that the pair is above the 200 week MA at 1.2465, I would be interested to fade this move if it got close to 1.2500.
For most of the Asian session, the EURUSD traded lower before finding support at 1.1711 which again is the 200 week MA. This remains a key level for the sellers to try and breach lower today but I suspect that buyers will be lurking around on masse today. On the topside, 1.1776 remains a key resistance and a break above that level opens the market up for a test of 1.1825.
Another pair to keep an eye on this morning is the USDJPY, the pair broke above resistance at 112.95 before settling down at 113.25. Ultimately, this break failed and the pair traded back to 112.90 later in the evening. There is some big divergence building on the 4 hour chart and I will be looking at the sellers to start building offers at 113.20 and look for some deep shorts.
Important Economic Data out today
10:15 GBP BOC Governor Carney Speaks
Consensus: None
Effect: More hawkish than expected is good for the GBP
14:30 USD GDP
Consensus: 3.00%
Effect: Actual higher than expected is good for the USD
14:30 USD Unemployment Claims
Consensus: 269K
Effect: Actual less than expected is good for the USD
Tentative GBP PM Theresa May Speaks
Consensus: None
Effect: More hawkish than expected is good for the GBP
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