Forex Market Preview

Dean Forex Market Commentary – 06 October 2016

We have four FX pairs on our radar today. The AUDUSD, NZDUSD, USDCAD and USDJPY. All are showing signs of running out of momentum from recent moves.

Dean's Daily FX Update – 06 October 2016

 

The GOLD price managed to slow the momentum from the dismal performance on Tuesday. The commodity currencies (AUDUSD, NZDUSD, USDZAR and USDCAD) were most affected and they did drift into our weekly FX trading zones which may create some opportunity today. The USDZAR was a little lacklustre yesterday and continues to trade in the middle of our trading zones.

The EURUSD looks more like a concertina and is trading in a very tight range. It seems as though no one really has any strong conviction on where the market will take this forex pair. In the video this morning we show how a triangle has formed in the EURUSD, perhaps only once we break this triangle will FX traders move this pair with any momentum. It may take a really good or bad Non-Farm Payroll (NFP) number tomorrow.

The GBPUSD is starting to feel a little like Groundhog Day. The pair traded at a 31-year low last night but had a slight rebound, I expect some of the same today with another look lower than 1.2688, a break lower could signal some more pain for the “Cable”. It is difficult to put a support level in this one but there could be some resistance at our previous support around 1.2915.

I have moved my support up in the AUDUSD to 0.7585. We are seeing a bit of consolidation around the current levels. I will be waiting to see how the current 4-hour candle closes. Looks to be a spinning top which could indicate a reversal. The near term target would be around 0.7640.

I felt the 0.7178 level would be very tough to break in the Kiwi (NZDUSD) but we did overshoot yesterday. We have established a very tight range and there is hope we have bottomed out at these levels. I will be watching for a break to the upside as I believe the move to overdone.

The only pair I managed to trade yesterday was the USDCAD. I took my entry on the hourly candle after seeing a massive, bearish pin needle. It was a small profit and I will be looking for the same trade today. Resistance at around 1.32.

The USDJPY has overshot our short term range. We are around our weekly resistance level at 103.50 and it will start to interest me if we break a little lower. A candle close above 103.66 would get me to forget this pair until possibly next week after the NFP numbers. They can cause the FX markets to zing around a bit!

On an economic front we have some chatter that if the NFP number is strong tomorrow the case will be very good for a rate hike in December. It seems unlikely that a new US President will want that so the doves and the hawks will be going for each other!

Also some talk that the EU looking to take a hard line in terms of a trade deal with the UK. Seems unlikely given that the UK is the second biggest economy in Europe but has certainly contributed to Sterling weakness.

Important Economic Data out today

  • 14:30                  USD                       Unemployment Claims

Daily FX Ranges

EURUSD

Resistance                                          1.1220 – 1.1235

Support                                                1.1180 – 1.1150

GBPUSD

Resistance                                          1.2768 – 1.2800

Support                                                1.2700 – 1.2670

AUDUSD

Resistance                                          0.7640 – 0.7656

Support                                                0.7594 – 0.7580

NZDUSD

Resistance                                          0.7206 – 0.7218

Support                                                0.7174 – 0.7150

USDCAD

Resistance                                          1.3200 – 1.3217

Support                                                1.3140 – 1.3120

USDJPY

Resistance                                          103.30 – 103.70

Support                                                101.90 – 101.70

USDCHF

Resistance                                          0.9780 – 0.9790

Support                                                0.9745 – 0.9733

USDZAR

Resistance                                          13.8272 – 13.9100

Support                                                13.6500 – 13.6000

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