The dollar continued its run yesterday and traded strongly against all the major forex pairs. Only Sterling put up a bit of fight. Today we will see if there is some profit taking now that the worst kept secret is out the bag. It looks there will be a rate hike in the US in December so the hawks have something to cheer!
Dean's Daily FX Update – 18 November 2016
In the Zone
- All major pairs are trading at their weekly extremes.
Recap
The headline act yesterday was Fed Chair Yellen testifying in front of the Joint Economic Committee, she indicated that a “rate hike could well become appropriate relatively soon” – I take this to mean December and the market will probably have a sharp sell off if the Fed does not hike come December.
She did caution about too much fiscal stimulus overheating the economy as well as de-regulating the banking industry. The market had one thing on its radar though and the greenback went bid with the expectation of the rate hike, considering the USD move in the last 10 days I am surprised at the magnitude of last night’s move as I thought that a lot of it had been priced in. I have calculated the daily technical levels but on a day like this these levels can be unreliable – there is a lot of divergence forming on all the pairs and so there may be some opportunity on the horizon.
I am not going to go through all the pairs today as everything has a similar message, the USD has made a massive move since the election result last week, and most pairs have traded weaker against the USD for 9 consecutive days. The exception is the GBP and the CAD which were both driven by fundamental factors and broke it up – both are still weaker against the USD though.
The only thing to do now is remain patient and wait for price to come to us, a relief rally will be in the offering in the next couple of sessions.
Daily FX Ranges
EURUSD
Resistance 1.0789– 1.0830
Support 1.0580 – 1.0600
GBPUSD
Resistance 1.2430 – 1.2450
Support 1.2380 – 1.2350
AUDUSD
Resistance 0.7430 – 0.7445
Support 0.7380 – 0.7365
NZDUSD
Resistance 0.7073 – 0.7095
Support 0.7032 – 0.7015
USDCAD
Resistance 1.3550 – 1.3580
Support 1.3480 – 1.3450
USDJPY
Resistance 110.58 – 110.88
Support 109.60 – 109.40
USDCHF
Resistance 1.0094 – 1.0130
Support 1.0050 – 1.0015
USDZAR
Resistance 14.5300 – 14.6200
Support 14.2600 – 14.2200
Important Economic Data out today
- 10:30 EUR ECP President Draghi Speaks
- 15:30 CAD CPI
- 16:30 USD FOMC Member Dudley Speaks
- 16:30 USD FOMC Member George Speaks
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