Dean's Daily FX Update – 27 October 2016
In the Zone
- USDCAD
- USDJPY
Noteworthy News
- Under the circumstances, Finance Minister Gordhan delivered a fairly solid Mid Term Budget Speech. It was largely well received with most parties seeming to be content, the only disappointed party was the EFF (no surprise there). It is more important how the credit agencies perceived it though and we will be monitoring this over the next few weeks.
Recap
Better than expected US Data was the catalyst for the USD to stage a nice rebound against all the major pairs, fortunately we don’t have any FOMC members allowed to speak this week to add fuel to fire, but all this good data has amplified the importance traders will place on the GDP data tomorrow.
The EURUSD attempted a late break higher yesterday but found a lot of resistance at 1.0950 which coincided with the 200 hour MA. The low trend line comes in at 1.0880 and a close below this line becomes bearish, I am watching the 1.0900 level with some keen interest and hoping that this pair finds support.
There is a lot of chatter around the market in London that Fund Managers are seeing value in all things British. My feelings on this are well documented and I am hesitant to look for the bottom in cable. GBPUSD has found some support at 1.2217, which is also the daily pivot, and early morning signs are that this pair may find some renewed energy. I hope that the GBPUSD traders will be rewarded for their bravery, but it is not a risk I am prepared to take right now and I continue to sit on the sidelines in this pair.
The USDJPY has given a lot of pips this month by purely playing the ranges, we look as though price is going to have another test of 104.50 – 104.70 this morning. I am getting a little cautious in this pair as I feel it has to break through that resistance at some point. My feeling is that we have done well in this pair and perhaps it may be prudent to look for opportunity elsewhere for now.
The commodity currencies had a mixed day, the AUDUSD gave away a lot of its recent gains but in the end closed off its highs – one gets the feeling that both pairs could come under a little bit of pressure in the coming days. Considering the political landscape, the USDZAR has been fairly resilient – South Africa will be working hard to stave off a credit downgrade, we may be moving in the right direction but one gets the impression that it may be too little too late.
Daily FX Ranges
EURUSD
Resistance 1.0925 – 1.0940
Support 1.0880 – 1.0860
GBPUSD
Resistance 1.2245 – 1.2277
Support 1.2170 – 1.2150
AUDUSD
Resistance 0.7675 – 0.7700
Support 0.7630 – 0.7617
NZDUSD
Resistance 0.7175 – 0.7190
Support 0.7138 – 0.7115
USDCAD
Resistance 1.3393 – 1.33400
Support 1.3350 – 1.3330
USDJPY
Resistance 104.60 – 104.96
Support 104.18 – 104.05
USDCHF
Resistance 0.9950 – 0.9970
Support 0.9915 – 0.9900
USDZAR
Resistance 13.9750 – 14.0000
Support 13.7900 – 13.7575
Important Economic Data out today
- 10:30 GBP Prelim GDP
- 14:30 USD Core Durable Goods
- 14:30 USD Unemployment Claims
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