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Dean's Daily FX Update – 05 October 2016
In the Zone
- NZDUSD
- USDCAD
- USDJPY
Noteworthy News
- Although not a voting member we saw the influence that Fed Lacker had yesterday, he is an eternal hawk and his overly hawkish comments was the catalyst for the USD to go on a bit of a rampage.
- A headline on Bloomberg, “ECB near consensus on need to taper QE before it concludes” was enough to see the EUR trading both sides of its range.
- Talk of the BOJ buying foreign bonds – this is in line with their most recent central bank meeting and had the desired effect as the JPY came under pressure.
Recap
The EURUSD traded the entire daily range yesterday, although we spent most of the morning drifting lower one headline was enough to send the pair to 1.1240, after the dust settled we traded back below that 1.1200 level. There may be some opportunity starting to surface, my concern is that even with this news we were not able to break the range. I am waiting for the range to break in this pair.
The GBPUSD still finds itself on the back foot, we have shot straight through the lower end of our range, and I would prefer to look for opportunity elsewhere as it is a dangerous game trying to pick the bottom of a “falling knife.”
Gold took an absolute battering today, it fell by 3% on the day and inevitably this lead to both the AUD and ZAR coming under pressure. This confirmed my fear in trading the ZAR and I am happy that we stayed out of this pair, there was just too much risk for the reward. Interesting to note is that both pairs are in the middle of our range and hopefully we may drift into range today.
Daily Ranges
EURUSD
Resistance 1.1225 – 1.1238
Support 1.1175 – 1.1150
GBPUSD
Resistance 1.2818 – 1.2835
Support 1.2715 – 1.2700
AUDUSD
Resistance 0.7660 – 0.7670
Support 0.7604 – 0.7587
NZDUSD
Resistance 0.7265 – 0.7280
Support 0.7174 – 0.7150
USDCAD
Resistance 1.3190 – 1.3235
Support 1.3100 – 1.3085
USDJPY
Resistance 103.00 – 103.37
Support 102.00 – 101.90
USDCHF
Resistance 0.9827 – 0.9835
Support 0.9745 – 0.9733
USDZAR
Resistance 13.9100 – 14.0000
Support 13.6900 – 13.5400
Important Economic Data out today
- 10:30 GBP Services PMIlo
- 14:15 CAD ADP Non-Farm Employment Change
- 14:30 CAD Trade Balance
- 16:00 USD ISM Non-Manufacturing PMI
- 16:30 USD Crude Oil Inventories
We have a lot on our plates today. Mixed indications dictate that we should play the waiting game until clear direction is shown. Things should start to unfold as soon as the high impact economic data rolls out and lights up the Forex charts. Conservative trading!
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