Forex traders seem to be positioning themselves for the FOMC meeting tomorrow. There are still opportunities to scalp a few pips and most seem to be in the commodity currencies. There are also possibilities in the Yen after such a weak performance against the dollar.
Dean's Daily FX Update – 13 December 2016
In the Zone
- AUDUSD
- NZDUSD
- USDCAD
- USDJPY
Noteworthy News
- Somebody in the White House is going to have to confiscate Donald Trump’s phone, he continues to make potential market moving statements over twitter. This has the potential to create massive market volatility over the next 4 years.
Recap
The market is clearly in no mood to let prices get away ahead of the FOMC tomorrow evening and there seemed to be a lot of “mock trading” last night. I did confirm that I am not in the market ahead of this meeting this week but if I was I would be looking for shorter term trades and possibly taking profit early.
The dollar did retreat a little yesterday ahead of the market, but prices have essentially been moved back to where they were in the Asia Pacific Session this morning. Although the Dow closed higher yet again, it is slowing momentum and the S&P 500 closed lower today. I will reiterate today that I will not trade the equities at all, prices seem inflated to me and is in need of some deflation – the real question though ahead of the inauguration of a market friendly Trump, how deep will that deflation be?
We discussed the formation of a triple bottom in the EURUSD over the weekend, and that it represented a sign to bounce. We traded to 1.0520 yesterday morning and the pair found a foothold and traded as high as 1.0650. This is a major resistance level as price moves towards both the 100 and 200 hour MA and 38.2% Fib level. I would be watching to see if we have some selling pressure at those levels and the key area today will be 1.0630, if we trade lower the EUR could be testing 1.0600 fairly quickly.
GBPUSD was in a bullish mood yesterday as the market changed polarity – sellers turned to buyers at the 1.2600 level. The price managed to move towards 1.2700 on the day but found some staunch resistance before it retraced to 1.2665 last night, cable seems nicely poised this morning at these levels although the buyers may have a slight edge – that being said, it will need to break 1.2700 to make a meaningful move. A break above 1.2700 and we target 1.2770 which was our big level last week and is also the 100 day MA, I would expect sellers to come into the market there, if we break below 1.2630 then 1.2600 comes back into play.
The USDCAD is another pair that threatened a “mock charge” yesterday, just as we thought that this pair would march higher it was contained at around 1.3150. Oil did find some support late in the US session last night and the CAD followed suit, as I highlighted in this morning’s video I do think that oil could give back further some of its gains, and will then lead the USDCAD higher today. It has formed a base at 1.3120 yesterday and it needs to break 1.3150 to extend further and possibly trade to 1.3200.
The AUDUSD and NZDUSD are still being defined to tight trading ranges and will have to break these parameters, ahead of the FOMC these ranges may hold – I cover both pairs in the morning video.
Daily Ranges 13/12/2016
Majors
EURUSD
Resistance 1.0630 – 1.0650
Support 1.0557 – 1.0550
GBPUSD
Resistance 1.2670 – 1.2700
Support 1.2620 – 1.2598
AUDUSD
Resistance 0.7494 – 0.7500
Support 0.7460 – 0.7440
NZDUSD
Resistance 0.7188 – 0.7200
Support 0.7145 – 0.7130
USDCAD
Resistance 1.3160 – 1.3190
Support 1.3120 – 1.3100
USDJPY
Resistance 115.68 – 115.90
Support 114.77 – 114.48
USDCHF
Resistance 1.0175 – 1.0187
Support 1.0138 – 1.0118
Rand
USDZAR
Resistance 13.7740 – 13.8200
Support 13.6000 – 13.5350
EURZAR
Resistance 14.5750 – 14.6162
Support 14.4475 – 14.3810
GBPZAR
Resistance 17.4108 – 17.4805
Support 17.1902 – 17.1045
Minors
AUDCAD
Resistance 0.9834 – 0.9848
Support 0.9780 – 0.9750
AUDJPY
Resistance 86.40 – 86.52
Support 85.81 – 85.44
EURCHF
Resistance 1.0770 – 1.0792
Support 1.0745 – 1.0720
EURGBP
Resistance 0.8410 – 0.8430
Support 0.8364 – 0.8340
EURJPY
Resistance 122.62 – 122.91
Support 121.70 – 121.56
GBPJPY
Resistance 146.14 – 146.60
Support 145.00 – 144.90
GBPCAD
Resistance 1.6640 – 1.6650
Support 1.6533 – 1.6504
GBPCHF
Resistance 1.2863 – 1.2878
Support 1.2800 – 1.2780
CADCHF
Resistance 0.7762 – 0.7781
Support 0.7710 – 0.7682
Indices
DE30
Resistance 11214 – 11260
Support 11115 – 11050
UK100
Resistance 6940 – 6960
Support 6880 – 6850
US500
Resistance 2260 – 2275
Support 2245 – 2225
US30
Resistance 19800 – 19900
Support 19600 – 19500
SA40
Resistance 44086 – 44200
Support 43200 – 43000
Commodities
BRENT
Resistance 56.35 – 56.70
Support 54.60 – 54.30
XAUUSD
Resistance 1170.00 – 1173.20
Support 1158.74 – 1154.00
XAGUSD
Resistance 17.19 – 17.30
Support 16.84 – 16.73
Important Economic Data out today
- 11:30 GBP CPI
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