Dean's Daily FX Update – 28 October 2016
In the Zone
- AUDUSD
- USDCAD
Noteworthy News
- Nissan confirmed that they will be building the Qashqai and X-Trail in Britain for the foreseeable future. This is a major coup for the British Automobile industry and will aid in adding jobs, I would expect to see some more of these headlines and we know that the GBP needs to see more of this to recover.
Recap
Yesterday it was the turn of Global Bonds to take centre stage and provide the catalyst for currency moves, it was the European bonds that started the move and this filtered through the wider market.
The USDJPY was the main benefactor of this bond sell off, partly because their major bonds are frozen and so there was a flight to the JPY. The pair eventually found a little bit of resistance around 105.30, stops haven’t been triggered just yet and so there is still room for a continuation of this move. I am sure there will be some brave sellers but I would prefer not to look for shorts just yet.
EURUSD traded in a tight range and was driven mainly by economic data, I am still seeing 1.0900 as the main support level and price is flirting once again at this handle. There does seem to be some nice bids building at these levels and with the EU securing a potential trade deal with Canada, price could be underpinned today.
My concerns in cable were once again underlined yesterday, despite encouraging news out of the UK of late, the GBPUSD still sold off sharply. The market is prepared to short any rally, I am not prepared to look for the bottom in this pair and I am still of the opinion that there is more to come, for that reason I continue to look for opportunity elsewhere.
Despite the political scenarios in South Africa, the USDZAR was impressively resilient yesterday. As investors look for yield after a bond sell off, the ZAR could have seen some inflows – it is encouraging if South Africa can avoid a credit downgrade.
I would be cautious against trading the AUDUSD and NZDUSD, of the majors the commodity currencies are probably most vulnerable when bonds come under pressure, both pairs are probably itching towards our weekly ranges but I suspect both could over shoot and trade significantly lower. Next week will perhaps hold more value in these pairs.
Daily FX Ranges
EURUSD
Resistance 1.0925 – 1.0944
Support 1.0880 – 1.0860
GBPUSD
Resistance 1.2245 – 1.2277
Support 1.2160 – 1.2130
AUDUSD
Resistance 0.7633 – 0.7680
Support 0.7600 – 0.7560
NZDUSD
Resistance 0.7150 – 0.7175
Support 0.7138 – 0.7115
USDCAD
Resistance 1.3393 – 1.3410
Support 1.3350 – 1.3330
USDJPY
Resistance 105.00 – 105.31
Support 104.50 – 104.30
USDCHF
Resistance 0.9950 – 0.9960
Support 0.9915 – 0.9900
USDZAR
Resistance 13.9292 – 13.9751
Support 13.7831 – 13.7182
Important Economic Data out today
- 14:30 USD Advance GDP
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