As traders start preparing for the holiday week ahead so trading activity becomes more limited, I suspect that this may continue into the New Year. As we have got closer to Christmas weekend so all the pairs and instruments have become muted and ranges have got narrower. It seems as though price action is dominated by trade flows, it becomes difficult to trade as the nature of these flows can be unpredictable.
Dean's Daily FX Update – 23 December 2016
In the Zone
- GBPUSD
- USDCAD
Noteworthy News
- Can someone please confiscate Donald Trump’s cell phone? I am not sure that he has any idea how much influence his tweets can have as President of the US. Considering some of the careless things he tweets – the next 4 years could be extremely volatile.
Recap
The good news in the EURUSD is that we did not break lower and test the lows at 1.0365 yesterday, and that we did find some support at 1.0420. The bad news is that an attempt to break through resistance failed yesterday and sellers are still very willing to lean against the 1.0465 resistance level. Today it seems to me that price should trade between the 200 hour MA and the 100 hour MA which trades at 1.0487 and 1.0420, the bulls will need EUR to remain above 1.0420 into the New Year to be cheerful, anything lower and I suspect that the sellers could wreak havoc in the coming months.
The USDJPY went into hibernation yesterday and the trading range on the entire day was a little more than 50 pips. After such a steep move since the US election, the holiday season has come at the wrong time for JPY traders, there is not enough liquidity in the market to drive this pair through support. The lows this week have been higher every day and this is a bullish sign, the market is definitely undecided on this pair and whilst I suspect that this could be one of the early movers in 2017 – I am not sure in which direction.
The USDCAD experienced a pretty weak CPI number yesterday and this was the catalyst to drive this pair higher – despite the bounce in oil prices. The high yesterday was at 1.3520 which is close to the highs we last saw a month ago, normally I wouldn’t hesitate to look for shorts at these levels but with reduced action I am not willing to get in the market just yet.
The NZDUSD is like a yo-yo this week, it is trading in a very tight range and yesterday’s range was about 30 pips. Like the USDJPY the market here is undecided and the decision may only come to the fray in early 2017.
Trading at this time of year can be tough and in many ways frustrating, sometimes your best trading decisions are the ones when you decide not to trade, and this week definitely has that feel. We will be with you next week but I suspect that liquidity won’t pick up until January.
To all clients I hope that you have a Merry Christmas/Happy Holidays.
Daily Ranges 23/12/2016
Majors
EURUSD
Resistance 1.0440 – 1.0460
Support 1.0365 – 1.0350
GBPUSD
Resistance 1.2360 – 1.2390
Support 1.2280 – 1.2360
AUDUSD
Resistance 0.7240 – 0.7265
Support 0.7200 – 0.7180
NZDUSD
Resistance 0.6940 – 0.6960
Support 0.6890 – 0.6880
USDCAD
Resistance 1.3500 – 1.3520
Support 1.3420 – 1.3400
USDJPY
Resistance 118.13 – 118.37
Support 117.10 – 116.77
USDCHF
Resistance 1.0288 – 1.0300
Support 1.0230 – 1.0200
Rand
USDZAR
Resistance 14.0785 – 14.1210
Support 13.9140 – 13.8527
EURZAR
Resistance 14.6620 – 14.6919
Support 14.5000 – 14.4542
GBPZAR
Resistance 17.3750 – 17.4140
Support 17.1840 – 17.1270
Minors
AUDCAD
Resistance 0.9729 – 0.9748
Support 0.9680 – 0.9660
AUDJPY
Resistance 85.42 – 85.63
Support 84.86 – 84.63
EURCHF
Resistance 1.0706 – 1.0711
Support 1.0682 – 1.0667
EURGBP
Resistance 0.8490 – 0.8520
Support 0.8410 – 0.8400
EURJPY
Resistance 122.80 – 122.91
Support 122.10 – 121.92
GBPJPY
Resistance 145.71 – 146.00
Support 144.29 – 144.10
GBPCAD
Resistance 1.6601 – 1.6617
Support 1.6514 – 1.6480
GBPCHF
Resistance 1.2650 – 1.2670
Support 1.2590 – 1.2580
CADCHF
Resistance 0.7645 – 0.7670
Support 0.7590 – 0.7560
Indices
DE30
Resistance 11473 – 11500
Support 11378 – 11352
UK100
Resistance 7055 – 7077
Support 7000 – 6980
US500
Resistance 2270 – 2300
Support 2264 – 2256
US30
Resistance 19980 – 20000
Support 19900 – 19850
SA40
Resistance 44400 – 44500
Support 43500 – 43000
Commodities
BRENT
Resistance 55.45 – 55.69
Support 54.30 – 54.00
XAUUSD
Resistance 1138.00 – 1141.11
Support 1128.10 – 1122.75
XAGUSD
Resistance 16.17 – 16.28
Support 15.80 – 15.63
Important Economic Data out today
- 15:30 USD Average Hourly Earnings
- 15:30 USD Non-Farm Employment Change
- 15:30 USD Unemployment Rate
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