Last week was dominated by the dollar as many of the Forex pairs we follow were handed a hiding by the US currency. Many are trading at significant lows and we will see if the USD can follow through or give back some of the gains. #StateCapture is also very much in the news and we will see if this had any effect on the ZAR.
Dean's Daily FX Update – 24 October 2016
In the Zone
- AUDUSD
- USDCAD
- USDCHF
Noteworthy News
- Russia are willing to work with the OPEC countries on oil cuts, the exception is Iraq who feel that they should be exempt from cuts – although they agree the rest of the world should cut. I expect Iraq to lose that absurd battle and will look for rallies in both oil and USDCAD as news filters in.
Recap
The USD is slightly higher this morning, although it would be prudent to state that the moves have been extremely subdued to price in many pairs moving by only a pip or two, perhaps these moves are just residual moves from Friday.
The exception is the commodity currencies which seem to be a little more resilient, we have seen reports come out over the weekend that major fund managers all seem to be finding a little value in metal prices. I have seen some really highly regarded analysts looking for a 15% recovery in Gold in 2017, these have helped the AUDUSD, NZDUSD and the USDZAR. It is a holiday in New Zealand today and South Africa also has the event risk this week, which seems to be more of a “soapie,” so I would be careful in those two pairs.
We have seen a lot of jawboning this weekend, both OPEC and non-OPEC countries seem to be willing to cut their production to stabilize the oil price. The exception has been Iraq who seem to believe that the rest of the world should cut, “but not at their expense.” This has put a little pressure on the oil price and subsequently the USDCAD is very subdued. The move in the CAD was rather sharp on Friday and we are hovering around major resistance at 1.3350 – I am still looking for short set-ups in the USDCAD.
On the broad front, the USD Index does seems to be slightly overdone and perhaps some broad USD selling may be on the cards in the next day or two.
Daily FX Ranges
EURUSD
Resistance 1.0918 – 1.0930
Support 1.0870 – 1.0850
GBPUSD
Resistance 1.2260 – 1.2270
Support 1.2180 – 1.2160
AUDUSD
Resistance 0.7640 – 0.7650
Support 0.7600 – 0.7590
NZDUSD
Resistance 0.7190 – 0.7200
Support 0.7150 – 0.7135
USDCAD
Resistance 1.3325 – 1.3350
Support 1.3257 – 1.3235
USDJPY
Resistance 104.00 – 104.30
Support 103.60 – 103.30
USDCHF
Resistance 0.9950 – 0.9985
Support 0.9900 – 0.9895
USDZAR
Resistance 14.0300 – 14.0600
Support 13.8800 – 13.8091
Important Economic Data out today
- 15:00 USD FOMC Member Dudley Speaks
- 15:05 USD FOMC Member Bullard Speaks
- 18:15 CHF SNB Chairman Jordan Speaks
- 21:30 CAD BOC Gov Poloz Speaks
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