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31 May 2017 – Dean Forex Market Commentary

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Dean's Daily FX Update – 31 May 2017

In the Zone

  • EURUSD
  • NZDUSD
  • USDJPY
  • USDZAR

Noteworthy News

  • With North Korea intent on developing the ICBM, it did not come as a surprise that the US started testing technology yesterday that could intercept these missiles. It is a shame that the world is getting to this place.

Recap

We mentioned yesterday that the US PCE may take more importance than what it normally does, the reason we highlighted this particular data set is after listening to the talking heads, it has become a favourite of the Fed in recent times. The PCE is an acronym for Personal Consumption Expenditure and is an alternative barometer of inflation, some feel that it is more accurate than the CPI as it is not weighted to a basket but actually calculated on expenditure.

The Fed are clearly using the PCE as an inflation target as opposed to CPI, it is becoming clearer that when they mention the inflation target of 2% – this is the one that they are targeting. The data come in at 1.5% and immediately the market started increasing odds of an interest rate hike in June, I have mentioned it before, but I am not convinced that we will see a hike in June – in fact in my opinion we will be lucky to see just one more this entire year. Although this reading came in as expected, it is still the lowest reading in 18 months, in other words inflation is going the wrong way and hence the reason for my doubt.

The EURUSD has been trading between the 100 and 200 hour MA of late which have converged to trade at 1.1187. The bulls will want to see a sustained move above this level to have the confidence to trade this pair higher. I have highlighted the 1.1205 level as the major resistance, we did have two attempts yesterday and failed. We may see the bulls have another attempt but I suspect that the bears are starting to wrestle the initiative away and we could see this pair trade lower today.

The weakness in the New York session allowed the USDJPY to trade below the psychological level at 111.00, there was a double bottom that formed at 110.85 last week and that is where we found some support today. The more these support levels hold, the more valid they become and this level will once again be monitored today, a break below will target 110.23 while another move higher will target 111.30.

The USDCAD battled again yesterday to find any direction and ended the day where it started – in the middle of the range. This pair will look to break this week, I suspect that we may trade lower and test 1.3425 and this is where this pair will stall. I will be interested in long set ups if price gets as low as this.

Daily Ranges 31/05/2017

Majors

EURUSD

Resistance                                          1.1180 – 1.1200

Support                                                1.1120 – 1.1110

GBPUSD

Resistance                                          1.2850 – 1.2870

Support                                                1.2800 – 1.2770

AUDUSD

Resistance                                          0.7470 – 0.7490

Support                                                0.7420 – 0.7400

NZDUSD

Resistance                                          0.7090 – 0.7110

Support                                                0.7050 – 0.7040

USDCAD

Resistance                                          1.3480 – 1.3500

Support                                                1.3400 – 1.3370

USDJPY

Resistance                                          111.20 – 111.40

Support                                                110.70 – 110.50

USDCHF

Resistance                                          0.9780 – 0.9800

Support                                                0.9720 – 0.9700

Rand

USDZAR

Resistance                                          13.1500 – 13.1850

Support                                                12.9870 – 12.9450           

EURZAR

Resistance                                          14.6550 – 14.7000

Support                                                14.5140 – 14.4900

GBPZAR

Resistance                                          16.8680 – 16.9060

Support                                                16.6560 – 16.6260

Minors

AUDCAD

Resistance                                          1.0040 – 1.0050

Support                                                0.9990 – 0.9950

AUDJPY

Resistance                                          82.80 – 83.00

Support                                                82.30 – 82.10

EURCHF

Resistance                                          1.0910 – 1.0920

Support                                                1.0850 – 1.0830

EURGBP

Resistance                                          0.8720 – 0.8750

Support                                                0.8680 – 0.8660

EURJPY

Resistance                                          124.40 – 124.60

Support                                                123.35 – 123.15

GBPJPY

Resistance                                          143.10 – 143.30

Support                                                141.90 – 141.80

GBPCAD

Resistance                                          1.7320 – 1.7340

Support                                                1.7210 – 1.7200

GBPCHF

Resistance                                          1.2550 – 1.2570

Support                                                1.2480 – 1.2460

Indices

DE30

Resistance                                          12630 – 12650

Support                                                12550 – 12520

UK100

Resistance                                         

Support                                               

US500

Resistance                                          2418 – 2430

Support                                                2390 – 2380

US30

Resistance                                          21080 – 21000

Support                                                20900 – 20870

SA40

Resistance                                          48000 – 48200

Support                                                47500 – 47100

Commodities

BRENT

Resistance                                          52.40 – 52.60

Support                                                51.20 – 51.00

XAUUSD

Resistance                                          1260.00 – 1270.00

Support                                                1240.00 – 1220.00

XAGUSD

Resistance                                          17.40 – 17.60

Support                                                17.00 – 16.80

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