A very busy week last week for FX traders. We expect this one to be no different. Many of the pairs we follow have moved to the extremes of their ranges. We will be focusing on the commodity currencies today as some of the moves may have been overdone last week. The safe-haven currencies are tricky to predict with traders positioning themselves after the US Elections.
Dean's Daily FX Update – 14 November 2016
In the Zone
- AUDUSD
- NZDUSD
- USDCAD
- USDZAR
Noteworthy News
- A 7.8 magnitude earth quake hit Christchurch, New Zealand on Sunday night. The damage will need to be assessed but we could see some infrastructure spend soon which would underpin the NZD.
- Talk that the President of China and President Elect Trump had a discussion over the weekend where a mutual relationship was discussed. Trump will be under pressure to act on his campaign rhetoric and news like this may not be well received by his loyal followers.
Recap
Overnight has seen a continuation of the USD rally that we saw last week after the election result, although it has been a broad rally, the momentum is starting to slow in the commodity currencies. I am not sure if this is Asia playing catch up from Friday, but we are starting to see some divergence forming in the lower time frames and I am hoping that this carries through to the 4H and Daily Charts.
The USDJPY has been the big mover early on, I thought that we would see more fight from the JPY up at 107.00 but we broke through resistance rather easily. The catalyst may have been weak inflation data this morning, we are currently trading at 107.50 and near resistance. I have made a conscious decision to stay away from the safe haven currencies – EUR, JPY, and CHF – for today and focus on the commodity currencies rather.
The EURUSD is flirting with 1.0800 again this morning – it has shown in recent weeks that it has an appetite for a fight though and so I would not be surprised if support held today. I have been reading numerous bank reports stating that they are expecting EURUSD parity in the next 6 – 12 months, and I would be interested to see how retail traders react to these reports this morning.
The GBPUSD has been a little bit weaker this morning, cable made some massive gains last week and so a small retracement this week could be expected. It is inevitable that we will start to see reports of potential trade agreements between the UK and the US in the wake of Donald Trump’s election last week, this could provide another bid for the GBP.
It is covered a little bit more in the video, but I am stalking the commodity currencies for some opportunity today. Iron ore futures were up close to 6% this morning and this bodes well for the metal prices this morning, I am hoping that this will underpin the commodity currencies, in particular the AUD and ZAR.
Daily FX Ranges
EURUSD
Resistance 1.0910 – 1.0935
Support 1.0790 – 1.0750
GBPUSD
Resistance 1.2598 – 1.2615
Support 1.2524 – 1.2500
AUDUSD
Resistance 0.7605 – 0.7626
Support 0.7543 – 0.7515
NZDUSD
Resistance 0.7150 – 0.7180
Support 0.7070 – 0.7035
USDCAD
Resistance 1.3560 – 1.3575
Support 1.3480 – 1.3450
USDJPY
Resistance 107.46 – 107.90
Support 106.35 – 106.12
USDCHF
Resistance 0.9903 – 0.9928
Support 0.9840 – 0.9820
USDZAR
Resistance 14.3500 – 14.4200
Support 14.0900 – 14.0200
Important Economic Data out today
- 17:00 EUR ECB President Draghi Speaks
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