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29 August 2017- Dean Forex Market Commentary

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Dean's Daily FX Update – 29 August 2017

In the Zone

  • EURUSD
  • AUDUSD
  • USDCHF
  • GOLD

Noteworthy News

  • It is hard to escape news of Hurricane Harvey and the North Korea missile testing today. The former may indicate rates left on hold while the latter could force response from the US. The market will be anxiously awaiting both this morning.

Recap

With the UK on bank holidays, the London session dictated a quiet trading day as it took liquidity out of the market. A lot of focus was and is on the developments in Texas surrounding Hurricane Harvey, there is expected to be several more days of rain to hit landfall and the impact on this could force the Fed to leave rates on hold for a little longer. The market also had to deal with the aftermath of a rather tired and boring Jackson Hole last week.

It seems as though the take away from Jackson Hole is that the economic environment in Europe is a little rosier than it thought, this meant that the EUR buying continued yesterday. We highlighted that 1.2000 would be the natural resistance level and that we could imaging sellers building offers there, price got to around 1.1990 yesterday and found some resistance. If price gets back in that vicinity this morning, I will start looking for reasons to trade the pair.

Late last night stories started unfolding that North Korea had tested another missile – this time it was fired into Japanese air space. Up to now the market has generally ignored these events but yesterday the market took notice and ran for safe havens as we saw the market go into “risk off” mode. The USDJPY had found some resistance at 109.40 yesterday and this development sent this pair spiralling down to 1.0830, I am looking to fade this move this morning and look for the pair to trade above 109.00.

Gold was the other big mover yesterday, early on in the morning the pair traded above recent resistance at 1300 and triggered stops all the way 1307. The pair started recovering somewhat but the North Korea story sent price racing to 1325, we have seen some recovery this morning. I still think that this testing may be a little strategic as they have fired it when the US is occupied with hurricane Harvey, I also believe that the Japanese reaction was a little bit dramatic and so much like the EURUSD and USDJPY – I will look to fade this move with 1300 being the natural support level to keep an eye on.

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

Important Economic Data out today

16:00                                     USD                                       CB Consumer Confidence

Consensus:                         120.5

Effect:                                   Actual higher than expected is good for the USD

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