The Kiwi (NZDUSD) and the Aussie (AUDUSD) had very bullish days yesterday and they have popped up on the radar. Those that traded the USDJPY and USDCHF would have made a few pips so a good start to the week.
Dean's Daily FX Update – 18 October 2016
In the Zone
- AUDUSD
- NZDUSD
Noteworthy News
- The UK announced a bilateral trade policy with New Zealand yesterday and this immediately facilitated a small rally in the pair. This must have been like a middle finger to the EU and I will look to see many of these announced in the next 6 months. It puts some pressure on Europe to negotiate a softer Brexit or risk losing one of their biggest trade partners.
- Finance Minister Gordhan has been invited by the NPA to make representation, the Finance Minister has received a lot of backing in the last week.
Recap
Both FOMC Members Rosengren and Fischer sounded as though they are prepared to pull the trigger on a rate hike in December, the market seems to be a little dubious though – after all, have we not heard these empty promises before? All this jawboning was largely ignored and the USD lost ground to almost all major currencies.
The report of a bilateral trade agreement with New Zealand was enough for the GBPUSD to stage a small recovery, only about 50 pips, but at this point cable will take whatever it can get. Before everyone get excited and starts picking lows in the pair, it still closed the day flat which should raise some red flags. I have said before, “don’t try and catch a falling knife” and I stand strong on that comment, I still believe that GBP can trade lower.
Despite the Draghi speech yesterday the EURUSD seems to have gone into another bout of sideways movement. There was a modest rally, if I am looking for the positive in this pair it is that trading has been able to have a found 1.1000 support a strong one – for now.
The USDJPY was unable to break resistance which worked very much in our favour yesterday, 104.40 seems to be putting a ceiling on matters for now. I mentioned it yesterday that 103.80 also seems to be building a support, as much as we can’t break higher it is equally concerning that we can’t break lower. I am keeping an eye on developments and we may perhaps see a channel forming.
The commodity pairs AUDUSD, NZDUSD, USDCAD and USDZAR all enjoyed a nice gain against the USD yesterday and momentum did follow through this morning. All pairs seem to be just losing a little steam at present and are all at critical impasses, we may find a little “cat and mouse” before we see if major levels hold or give.
Daily FX Ranges
EURUSD
Resistance 1.1021 – 1.1029
Support 1.0980 – 1.0950
GBPUSD
Resistance 1.2239 – 1.2276
Support 1.2150 – 1.2140
AUDUSD
Resistance 0.7660 – 0.7700
Support 0.7612 – 0.7596
NZDUSD
Resistance 0.7180 – 0.7200
Support 0.7109 – 0.7090
USDCAD
Resistance 1.3167 – 1.3185
Support 1.3090 – 1.3079
USDJPY
Resistance 104.20 – 104.40
Support 103.76 – 103.50
USDCHF
Resistance 0.9900 – 0.9905
Support 0.9850 – 0.9820
USDZAR
Resistance 14.2340 – 14.3000
Support 14.0800 – 14.0280
Important Economic Data out today
- 14:30 CAD Manufacturing Sales
- 14:30 USD CPI
- 14:30 USD CPI
- 17:00 NZD GDT Price Index
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