A very interesting day yesterday with the RAND dominating proceedings. We also got our break from our triangle formation in the EURUSD. Dean discusses how he played this break. He also discusses opportunities in the AUDUSD and USDCHF.
Dean's Daily FX Update – 12 October 2016
In the Zone
- AUDUSD
- USDCHF
- USDZAR
Noteworthy News
- It had been too quiet for too long in the USDZAR, and yesterday delivered the blow that was probably bubbling under the surface. Finance Minister Gordhan received summons over fraud charges which left the ZAR in tatters, losing about 4% on the day. The timing of this is atrocious and fears of a credit downgrade (which have a negative impact on the country) must now come front of mind again.
Recap
For local traders, it was the USDZAR that took centre stage (noted above). Technically speaking the ZAR traded through countless resistance levels and triggered as many stops, 14.4000 is a major resistance level and price did hold at those levels. You may find some brave souls looking to establish shorts at these levels, but by my experience you can throw technicals out of the window when political factors may be in play.
The GBPUSD continued its downward spiral yesterday and for lack of a better expression, it got spanked. It traded through 4 big figures in a single day (1.2300, 1.2200, 1.2100 and 1.2000). Despite some fighting talk from Theresa May the momentum did not slow down yesterday and we were left wondering how the market was going to stop the bleeding. Already this morning the GBPUSD has rallied by close on 200 pips (who said that Asian session was boring?), and I am left wondering if the traders have drawn a line in the sand.
The EURUSD finally broke below the triangle parameters yesterday, in today’s video we cover how we traded this pair once we have the break.
The three commodity currencies AUDUSD, NZDUSD and USDCAD were all teetering around major MA (Moving Average) levels for most of the day and waiting for something to give. It looks as though all three pairs started their moves in the Asian Session and I am looking for secondary entry levels in all three of these pairs.
The USDJPY was where the opportunity was yesterday and I am happy that we were able to take advantage of it yesterday. At this point the market seems that it has not made its mind on how to trade this pair – to track the dollar higher or act as a safety haven for when stocks start the tumble. My opinion is that we have made our pips in this pair and will look for opportunity elsewhere.
The market looks like a “belter” this morning with all of the major pairs staging healthy rallies against the USD already. With the USD been particular strong the past week, I am looking for secondary entries into these pairs.
Daily Ranges
EURUSD
Resistance 1.1110 – 1.1120
Support 1.1049 – 1.1034
GBPUSD
Resistance 1.2328 – 1.2388
Support 1.2200 – 1.2150
AUDUSD
Resistance 0.7590 – 0.7610
Support 0.7550 – 0.7530
NZDUSD
Resistance 0.7100 – 0.7120
Support 0.7063 – 0.7040
USDCAD
Resistance 1.3220 – 1.3250
Support 1.3190 – 1.3170
USDJPY
Resistance 103.88 – 103.98
Support 103.09 – 102.85
USDCHF
Resistance 0.9877 – 0.9900
Support 0.9840 – 0.9825
USDZAR
Resistance 14.2500 – 14.4000
Support 14.0000 – 13.9400
Important Economic Data out today
- 14:00 USD FOMC Member Dudley Speaks
- 15:40 USD FOMC Member George Speaks
- 20:00USD FOMC Meeting Minutes
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