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Dean's Daily FX Update – 09 October 2017
n the Zone
- EURUSD
- GBPUSD
- AUDUSD
- NZDUSD
- USDCAD
- Gold
Noteworthy News
- Rumours are circulating that North Korea will start testing a long range missile capable of reaching the US west coast. This could create some volatility in both Gold and the USDJPY.
Recap
As we discussed for most of the week, the market was poised to take particular interest in the US employment report on Friday. We did warn that the report could be substantially lower because of the recent hurricanes and this proved correct ad the number printed a 30,000 job loss – the first job in 7 years, the initial reaction was to ignore this number as the dollar started strengthening.
After that initial knee jerk reaction, you could actually see the market start to question itself as the dollar gains started to slowly reverse. The catalyst for the dollar strength was the increase in wages, but I am sure this was also the reason for the reversal – the market started realizing that this number would have been skewed upwards. Throw in the fact that headlines started filtering through that North Korea had fired another missile test and the greenback was led to trade in a rather choppy fashion to end the week.
The EURUSD finished the week at 1.1725 as the bulls managed to keep the 1.1700 support level intact. I believe that there will be another test down to those lower levels today but I also am firmly in the belief that bids will start to build at 1.1700. The target for the bulls will be to be 1.1785, this is becoming a strong resistance level which means the EURUSD is still relatively range bound.
The other big mover was the USDCAD, as it also enjoyed a rather solid employment report – the bigger news was that Canada was going to skirt any hurricane for now which keeps their oil industry intact. It was a hard slog for the CAD to trade lower but it eventually finished the day at 1.2525, I would not be surprised to see a small relief rally, but ultimately I am looking for the pair to trade lower to 1.2450.
Today could be a pretty low key day with Japan, Canada and the US all enjoying a bank holiday meaning that the early morning London flow may be the only opportunity to trade. I prefer to wait for tomorrow to take advantage of the market.
Important Economic Data out today
All Day CAD Bank Holiday
All Day USD Bank Holiday
All Day JPY Bank Holiday
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