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Dean Forex Market Commentary – 21 November 2016

The dollar has been rampant since the election of Donald Trump. All currencies paired against the dollar have been battered and trading a multi-month lows. The thought is that some of the USD bulls may look to take some profits heading into the Thanksgiving weekend and so we are hoping that this might be the start of a bit of a breather for the dollar.

Dean's Daily FX Update – 21 November 2016

 

In the Zone

  • All major pairs are trading at their weekly extremes.

Recap

This morning has been a little bit of a non-event in my book, all pairs have traded on both sides of the market. The day was initiated with further USD buying, but I am left wondering if that move was a residual move – the late comers to the party. The pairs were all pretty quick to bounce which makes me think that the market is waiting to see if we there is some sort of rally today, we will probably get a little bit more insight when London opens.

Expectantly it was the Asia-Pacific currencies that had the biggest move this morning, this is because there would have been more liquidity in the JPY, AUD and NZD. The USDJPY did move through 111.00 level before an attempted dip lower, we have since stabilized around 111.00. The AUDUSD was a tad weaker than the NZD as it has been a severe under performer the past 10 days. Both pairs are now trading close to flat on the day and I am encouraged that none of the 3 pairs have run away. I said it last week but I have a suspicion that this week could be an Aussie week.

The EURUSD had a little bit of a lower attempt this morning but we are now trading back above 1.0615, this is where the pair topped on Friday so it will be vital to get a look higher if are to have a sustained rally. The USDCHF is trading in a very similar manner and is also at a key resistance level right now. The GBPUSD is also unchanged on the day but threatening to break higher.

The USDZAR looks to be a nice trade to me – political drama has gone quiet for now and that always scares me. The metal prices are starting to recover a little bit, I will be monitoring the bonds as this could be the first clue that fund managers are starting to wet their appetite for increased risk and with it a bout of profit taking on USD based assets.

USDCAD is the odd man out, there is chatter that we are going to see an oil production freeze announced at the OPEC meetings next week. This will buoy the oil market and in turn will be a catalyst for the CAD to get stronger.

We have had a big move in the last 10 days, we also have a short week because of the Thanksgiving holidays in the US. I am of the opinion that after such a big move, traders will start to lighten their load and take some profit – I am patiently waiting for an opportunity.

Daily FX Ranges

EURUSD

Resistance                                          1.0675 – 1.0700

Support                                                1.0600 – 1.0580

GBPUSD

Resistance                                          1.2415 – 1.2440

Support                                                1.2330 – 1.2300

AUDUSD

Resistance                                          0.7391 – 0.7400

Support                                                0.7320 – 0.7300

NZDUSD

Resistance                                          0.7045 – 0.7060

Support                                                0.7000 – 0.6985

USDCAD

Resistance                                          1.3530 – 1.3550

Support                                                1.3420 – 1.3400

USDJPY

Resistance                                          111.00 – 111.30

Support                                                110.30 – 109.88

USDCHF

Resistance                                          1.0107 – 1.0130

Support                                                1.0050 – 1.0015

USDZAR

Resistance                                          14.5300 – 14.6200

Support                                                14.2600 – 14.1600

Important Economic Data out today

  • 18:00                     USD                       ECB President Draghi Speaks

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