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Dean Forex Market Commentary – 03 November 2016

03 Nov
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Dean Forex Market Commentary – 03 November 2016

The State Capture report dominated proceedings in South Africa. Forex traders were also focused on the FOMC meeting and unsurprisingly they did not raise rates in the US. We expect more volatility as we approach the US Elections so please take care and adjust your position size accordingly.

Dean’s Daily FX Update – 03 November 2016


In the Zone


Noteworthy News

  • If President Zuma was under pressure yesterday morning, today could be even tougher. The more you read of the State Capture Report, the more you shake your head. The President is in a bit of a corner at the moment and developments could affect the ZAR going forward.


The worst kept secret in the market materialized last night as the FOMC decided to leave rates on hold, this year’s US Presidential Election has been extraordinary and the last thing the Fed wanted to do was hike mere days before. They did leave the door open for a hike in December, the next 5 days will be tough trading. Rumour is that the markets fear for a Trump victory, simply because he is an unknown, it is for that reason that I will sit on the side-lines from now until Wednesday next week because as Brexit illustrated – the unknown can happen.

The Dollar spent the majority of the day where it left off on Tuesday – firmly on the back foot, although not at the same magnitude. We made the conscious decision to move into a “defensive” mode yesterday and instead take our cues off the daily chart.

Due to the “safe haven” element in both the EURUSD and USDCHF, we have seen some nice action in both pairs and will cover this a little bit more in this morning’s video. The USDJPY is in the same boat and on the back of election anxiety, and also in part to weaker Indices the JPY was once again able to make some inroads. Solid support looked to be building at around 103.00 and I was anticipating a real battle at these levels, for now the sellers are prevailing with price trading this morning lower at 102.70. The USDJPY will be influenced by what the equity market does today – US Indices have been had 6 consecutive down days and so there may be a relief rally brewing. Any bounce in the indices will bring with it a bounce in the USDJPY, something to keep an eye on today.

Both the AUDUSD and USDCAD were largely unchanged on the day, both in their weekly trading zones, but as I mentioned earlier I am not looking to take any positions with a NFP release tomorrow and an election on Tuesday. South Africa showed the world yesterday that we have a fully independent Justice System, and the market liked it!! The USDZAR had another bumper day yesterday, technical support at 13.3000 is still very strong though and we immediately bounced off that level.

The NZDUSD was definitely the recipient of the “play of the day” yesterday.  Coupled with the weak USD, there was really strong employment and inflation data out of New Zealand and this was the catalyst for the Kiwi to trade 1.50% stronger against the USD. We are nearing key resistance levels now and so another one to keep an eye on.

Daily FX Ranges


Resistance                                          1.1120 – 1.1160

Support                                                1.1075 – 1.1050


Resistance                                          1.2320 – 1.2364

Support                                                1.2250 – 1.2240


Resistance                                          0.7670 – 0.7700

Support                                                0.7634 – 0.7626


Resistance                                          0.7292 – 0.7320

Support                                                0.7230 – 0.7220


Resistance                                          1.3400 – 1.3415

Support                                                1.3330 – 1.3310


Resistance                                          103.50 – 103.75

Support                                                102.80 – 102.35


Resistance                                          0.9758 – 0.9770

Support                                                0.9700 – 0.9670


Resistance                                          13.5675 – 13.7000

Support                                                13.3800 – 13.3000

Important Economic Data out today

  • 11:30                      GBP                       Services PMI
  • 14:00                     GBP                       BOE Inflation Report
  • 14:00                     GBP                       MPC Official Bank Rate
  • 14:00                     GBP                       Monetary Policy Summary
  • 14:00                     GBP                       Official Bank Rate
  • 14:30                     GBP                       BOE Governor Carney Speech
  • 14:30                     USD                       Unemployment Claims
  • 16:00                     USD                       ISM Non-Manufacturing PMI

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