It appears some of the ranges are tightening ahead of two big pieces of news out of the US. Forex traders are positioning themselves ahead of the FOMC and Non-Farm Payrolls. These are two crucial economic events and may shape how we move into the holiday season.
Dean's Daily FX Update – 30 November 2016
In the Zone
- USDJPY
- USDCHF
Noteworthy News
- The refusal of Iran and Iraq to agree to an oil production cut, has left Saudi Arabia starting to pull away from agreeing anything. These meetings look vulnerable at best this morning, no deal today would put both the oil price and the CAD under extreme pressure today.
Recap
It seems a little like de je vu as the market treads water leading into December, we have a lot of event risk on the horizon. Yesterday perhaps gave us a little insight into what we can expect for the next couple of days. It does seem to me as though the headlines and thus fundamental analysis is taking centre stage, this is going to give us any short term volatility and perhaps we are currently in a scalpers paradise.
The major pairs did spend most of the morning trading slightly stronger against the USD, some solid US data then gave the greenback an initial boost, but the majors did start making tiny in roads into those USD gains. It is concerning that the gains have been fairly muted and already this morning we can see the Dollar taking those gains back. The market is clearly waiting for the FOMC, although we are certain to get a hike in 2 weeks, the market is waiting for some message as to what the rate path will be going forward.
The EURUSD had a fantastic NY session last night and was able to break a tight trading range, more importantly is that we were able to have a close above the 1.0620 level. It is giving back some of the gains this morning and a test of 1.0620 is going to be inevitable, I will be watching this morning to see if this level has changed polarity and become support or if last night was a false dawn.
The GBPUSD had a fantastic day yesterday, but it failed to break that top side target of 1.2515 we mentioned yesterday. This resistance is proving to be a tough nut to crack, it is proving more resilient this morning than the rest of the pairs and perhaps we may try and break resistance again.
Headlines on oil continue to dominate the market, what seemed a certainty last week is currently 50/50. Whilst OPEC are confident that there will be a deal agreed today, it seems as though it all hinges on Iran and Iraq. Saudi Arabia could also put the spanner in the works today if Iran and Iraq get favourable conditions. Analysts are projecting that oil could tumble by as much as 10% if there is no deal agreed today.
The USDCAD will be dictated by the oil headlines and it is for this reason that I will sit this pair out, while I suspect that a deal will be agreed, the OPEC countries are a fickle bunch and anything could happen today.
The AUDUSD looked as though it was going to attempt to have a look at that 0.7500 level, but was met by a wall of sellers this morning. The NZDUSD fared slightly better, but only because there was some solid economic data to help slow the momentum. Metal prices were under pressure again this morning with iron ore trading limit down. This could put the commodity pairs, including the USDZAR, under a little bit of pressure this morning.
Daily FX Ranges 30/11/2016
Majors
EURUSD
Resistance 1.0640 – 1.0660
Support 1.0590 – 1.0575
GBPUSD
Resistance 1.2498 – 1.2520
Support 1.2419 – 1.2400
AUDUSD
Resistance 0.7490 – 0.7505
Support 0.7450– 0.7440
NZDUSD
Resistance 0.7135 – 0.7155
Support 0.7100 – 0.7083
USDCAD
Resistance 1.3467 – 1.3500
Support 1.3400 – 1.3380
USDJPY
Resistance 113.26 – 113.79
Support 111.92 – 111.60
USDCHF
Resistance 1.0150 – 1.0170
Support 1.0105 – 1.0092
Selected FX Pairs
USDZAR
Resistance 14.0400 – 14.0770
Support 13.8086 – 13.6900
AUDCAD
Resistance 1.0059 – 1.0075
Support 1.0014 – 1.0000
EURCHF
Resistance 1.0750 – 1.0776
Support 1.0730 – 1.0700
EURGBP
Resistance 0.8534 – 0.8547
Support 0.8487 – 0.8450
EURJPY
Resistance 120.00 – 120.45
Support 119.25 – 119.07
GBPJPY
Resistance 141.46 – 141.74
Support 139.60 – 139.25
Commodity and Indices
XAUUSD
Resistance 1195.00 – 1199.40
Support 1181.04 – 1177.00
XAGUSD
Resistance 16.65 – 16.78
Support 16.44 – 16.30
DE30
Resistance 10680 – 10740
Support 10538 – 10467
UK100
Resistance 6821 – 6835
Support 6752 – 6723
US500
Resistance 2200 – 2205
Support 2196 – 2190
BRENT
Resistance 49.08 – 49.90
Support 45.18 – 44.80
Important Economic Data out today
- 09:00 GBP Bank Stress Test Results
- 14:30 EUR ECB President Draghi Speaks
- 15:15 USD ADP Non-Farm Employment Change
- 15:30 CAD GDP
- 17:30 USD Crude Oil Inventories
- All Day OPEC Meetings
High Risk Investment Warning: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. Before deciding to trade the products offered by BlackStone Futures you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. BlackStone Futures provides general advice that does not take into account your objectives, financial situation or needs. The content of this Website must not be construed as personal advice. BlackStone Futures recommends you seek advice from a separate financial advisor. Please take the time to read our Risk Disclosure Notice.
