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Dean's Daily FX Update – 10 August 2017
In the Zone
- EURUSD
- GBPUSD
- AUDUSD
- GOLD
- ALSI
- Oil
Noteworthy News
- Conflict between the US and North Korea is becoming inevitable every day and such I suspect that this may present some opportunity for Gold traders.
Recap
The entire day yesterday centred on comments made by Donald Trump that they would meet North Korea with “fire and fury like the world has never seen.” The immediate reaction was for the safe haven assets like Gold, CHF and JPY to rally as the odds on conflict start to rise. Further comments on the now infamous Trump twitter account boasting about the nuclear arsenal at his disposal do not bode well for the future, as we now have two leaders that are willing to exploit nuclear weapons.
The market did retrace some of those big moves during the Asian session, and sensibly started focusing on the data on hand. Fed members Bullard and Evans – the two most dovish members – both spoke about winding down the balance sheet starting in September, the market has not reacted as yet but I suspect that this may start filtering through.
The EURUSD started the day by weakening 60 pips at the open of the London session, and then spent the rest of the day retracing that move. The significance of this move is that it had a look below the 100 hour MA and failed, the big level to watch today is clearly 1.1775 ahead of natural resistance at 1.1800 as this is where sellers will start leaning. The buyers continue to build bids at 1.1710 for now.
Cable continues to trade in the middle of the range around 1.3000 and needs direction from somewhere to break that range. The better than expected US data on Tuesday looked like it was going to be catalyst but it failed, the key level for me to watch here is the 100 hour MA at 1.3050 where I believe that sellers will look to lean.
The RBNZ left rates on hold last night, as expected but were not really as dovish as what I was expecting – or hoping. The pair did test upside resistance and fail again which is encouraging as I believe that the market will start weakening this morning. Now that major support has broken, I am hoping for the pair to test 0.7200 over the coming days.
Current market conditions are dictating to me to start focusing on short term opportunities in the major pairs, at least until September roles on.
Keep an eye out for the afternoon video that tries to tie everything together.
Important Economic Data out today
10:30 GBP Manufacturing Production
Consensus: 0.0%
Effect: Actual higher than expected is good for the GBP
14:30 USD PPI
Consensus: 0.1%
Effect: Actual higher than expected is good for the USD
14:30 USD Unemployment Claims
Consensus: 240K
Effect: Actual lower than expected is good for the USD
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