The commodity currencies remain in focus today. Gold and Oil rallied late yesterday and the FX pairs like the AUDUSD and USDCAD will be in the spotlight this morning. Dean is staying out of the safe-haven pairs for the time being.
Dean's Daily FX Update – 15 November 2016
In the Zone
- AUDUSD
- NZDUSD
- USDCAD
- USDZAR
Noteworthy News
- As the market digests President Trump’s campaign policies, so the likelihood of a December Rate Hike moves to 92% – the USD could be in the process of pricing this in.
Recap
We had a continuation of the last week’s theme working itself through the market yesterday, a stronger US Dollar. There were some signs that perhaps the market was moving back to normalization yesterday which means that we may have some technical set ups brewing. There was a rather subdued equity market, divergence forming in FX pairs and a late night rally in commodities like Gold and Oil.
The most complexing trade was probably the GBPUSD, the pound spent most of last week tracking the USD stronger on optimism of a trade agreement with the US. As the USD moved slightly higher yesterday, cable moved sharply lower – it gave away almost all of its gains. It did find support at the 200 MA of 1.2450 yesterday, I am going to use this as my reference point today.
I mentioned that the EUR looked as though it had a little bit of fight in it yesterday, I was a little bit concerned when price moved to its year lows at 1.0710. I was equally encouraged however that the break did not gain any momentum, it found massive support and surged higher. As is in cable the EURUSD is in a bit of a conundrum this morning – are we going to have another look at 1.0710 or are we going to test resistance at 1.0820. Regardless, this may be an opportunity to use these levels as a “range” and trade with the trend.
It seems to be getting a little old, but we saw something similar in the USDJPY – it seemed as though all sellers from last week had withdrawn their offers and the pair went ratcheting towards 108.50. It also go to the 200 MA and found immediate resistance. We are forming a bit of a range between 108.50 on the topside and 108.10 on the lower side, I am watching this morning to see which way it decides to break.
For those of you that watch the USD Index, it does seem as though the Dollar is over extending itself and it is forming some divergence on the 4H and Daily Charts. This does hold with the theory that we are starting to see some life spark in the other major pairs – I am hoping that we find some opportunity forming today.
Daily FX Ranges
EURUSD
Resistance 1.0817 – 1.0840
Support 1.0740 – 1.0724
GBPUSD
Resistance 1.2570 – 1.2585
Support 1.2460 – 1.2425
AUDUSD
Resistance 0.7570 – 0.7589
Support 0.7545 – 0.7529
NZDUSD
Resistance 0.7140 – 0.7150
Support 0.7082 – 0.7076
USDCAD
Resistance 1.3565 – 1.3585
Support 1.3510 – 1.3490
USDJPY
Resistance 108.20 – 108.50
Support 106.90 – 106.70
USDCHF
Resistance 0.9970 – 1.0020
Support 0.9906 – 0.9890
USDZAR
Resistance 14.4670 – 14.5100
Support 14.2112 – 14.1162
Important Economic Data out today
- 9:00 EUR German Prelim GDP
- 10:15 AUD RBA Governor Lowe Speaks
- 11:30 GBP UK CPI
- 12:00 GBP Inflation Report
- 15:30 USD Retail Sales
- 20:30 USD FOMC Member Fischer Speaks
- Tentative NZD GDT Prices
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