The story of the day is undoubtedly the RAND. Earlier this morning, NPA Head, Shaun Abrahams issued a summons for Finance Minister Pravin Gordhan on what is believed to be a fraud charge. The meddling from on high seems to know no bounds and this could be the final straw for a ratings downgrade in December.
Technically the USDZAR has now blown through our resistance at 13.94 – 13.98. In a matter of minutes, we were trading 14.25 and we have a high for the day of 14.32. We are a little off that high at 13.27 but this one is only for the brave. The high set back in August was 14.75 and we would imagine that could be the first major resistance for this FX pair. Interestingly, we have traded 2.5x the Average Daily Range which is significant.
The EURUSD finally broke out of our triangle formation and traded down through our region of support. The Forex market found a bottom at 1.1071 earlier this afternoon. The weakness started despite decent ZEW Survey numbers out of Germany. These measure economic confidence and had a reasonable jump from the same time in September. The outlook outside of Germany was negative and this was the likely reason for the selloff.
The GBPUSD has continued its slide all of today. The flash crash of Thursday seems to have given the market a target to work towards and perhaps the algo was not all that faulty after all. I don’t think there are many reasons to be involved in this pair and probably one to sit out of. Looking for a bottom could be a painful experience!
There was a brief rally in the AUDUSD in the Asian session and it topped out in our resistance area of 0.76 – 0.7610. There was a chance to get short around the 0.76 area and currently we are trading at the lows for the day at 0.7535. 65 pips is a nice trade and for those who got involved … well done.
Dean was watching NZDUSD too this morning but only as a spectator. It was trading at lows not seen for weeks and there was little in the way of support to speak of. We did mention a week or two back that if the Kiwi failed to get through the resistance at 0.73 there was very little below. Looking at things we could see this trade down to previous support of 0.6950.
A trade in the USDCAD was on the radar this morning after Russia shock up the oil-correlated currencies yesterday. One utterance from Putin caused the Canadian Dollar to rally to 1.3140 but we have seen profit taking all day since. We had another look at 1.3250 but have traded lower in the last few hours. This region had proved terrific resistance and we will see how price reacts over the next day or so.
In the USDJPY, the 104 region has provided stout resistance. We have had two solid attempts over the last couple of days but have been knocked back each time. I think Dean will be watching closely for opportunities to short this pair.
No major news items out tomorrow but I would imagine we could see further volatility in the RAND FX pairs.
High Risk Investment Warning: Trading foreign exchange and/or contracts for difference on margin carries a high level of risk, and may not be suitable for all investors. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. Before deciding to trade the products offered by BlackStone Futures you should carefully consider your objectives, financial situation, needs and level of experience. You should be aware of all the risks associated with trading on margin. BlackStone Futures provides general advice that does not take into account your objectives, financial situation or needs. The content of this Website must not be construed as personal advice. BlackStone Futures recommends you seek advice from a separate financial advisor. Please take the time to read our Risk Disclosure Notice.
