The markets appear to be in a bit of a lull, according to Dean, and he can’t wait for after Labour Day (5th September 2016) when everyone should be back from their summer holidays. This is when the Forex markets and equities should find a bit more direction for the end of the year.
Dean's Daily FX Update – 31 August 2016
We can see in the EURUSD that the got to the 61.8% Fibonacci level yesterday and then sold off a little. There is not a lot of price action to help us determine the next move although there is a bit of divergence on the 4-hour chart where price is trending downward but the MACD is moving back towards the waterline.
Cable (GBPUSD) was the surprise FX pair for Dean because the market obeyed the support line he inserted yesterday at 1.3060. The more attempts at these type of lines, the stronger the level becomes and the more validity it has.
Dean is also seeing some divergence in the AUDUSD but it may only become tradable after the Non-Farm Payroll (NFP) number on Friday afternoon. This could be the catalyst for a rebound of the Aussie currency.
The NZDUSD is where Dean thought there would be the biggest correction but this has not quite played out as expected. Leaving the Kiwi alone for the moment and prefers the AUDUSD for now.
The dollar has been on a rampage against the Yen and continues to move higher. When it breaks a range it can move quite fiercely and unless you are already long then it may be worth sitting on the sidelines for the time being. Make use of trailing stops and don’t forget NFP on Friday.
Technically, it looks like a good trade to be short the USDZAR but the Gordhan issue still hangs over the market. Until there is some clarity there, Dean is hesitant to trade. An arrest of Pravin could send this spiking higher.
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