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In the Zone
- AUDUSD
- NZDUSD
- USDCAD
Market Insight Commentary – Forex
Today's News Headlines
- EU Junker commented yesterday what a tough negotiator PM May is, but is confident a deal is done. Whenever we see praise like this, I start to suspect that a deal has already been agreed and would not be surprised to see something released later this week.
Market Insight Commentary – Indices
Market Recap
There was not a lot of opportunity yesterday as the market still seems a little conflicted on where the dollar will go next. The morning was dominated by the negotiations between the UK and the EU, the “divorce settlement” and the Irish border situation is still holding up Brexit. PM May was willing to negotiate on the Irish Border, but Northern Ireland is adamant that there be no regulatory divergence. The consultation was thus called off early and both the EU and UK agreed to meet later in the week.
Any form of breakdown in talks is perceived by the market as negative for the GBPUSD and the pair fell by over 100 pips on the breakdown and found support at 1.3410. The 100 hour MA is trading at 1.3440 and price action is hovering around that level, this MA will rise during the day and I suspect may become to define the risk for the day. Stay above this level will be bullish, while the sellers won’t get involved with much momentum until this level breaks level.
I am also watching the equity markets with some interest, the Dow still did not see any easing on the back of tax reform finally being passed. The equity markets will drive the USDJPY though and the fall in the other equity markets meant that the USDJPY was forced lower. It took some time to find momentum, but the pair finally broke through the floor at 112.65, the problem the sellers have is that the pair was not able to trade to the 100 hour MA at 112.25, the sellers will need that level broken to gain the upper hand.
It has been difficult for technical traders of late, but we have been here before in the last 6 months. It allows us to focus on only a couple pairs at a time. Keep patient, opportunity will present itself.
Important Economic Data Due Today
11:30 GBP Services PMI
Consensus: 55.2
Effect: Actual higher than expected is good for the GBP
15:30 CAD Trade Balance
Consensus: -2.3Bln
Effect: Actual higher than expected is good for the CAD
17:30 USD ISM Non-Manufacturing PMI
Consensus: 59.2
Effect: Actual higher than expected is good for the USD
