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In the Zone
- AUDUSD
- USDCAD
Market Insight Commentary – Forex
Today's News Headlines
- Donald Trump continues to move ahead with his immigration agenda, but it has been hampered yet again by a possible US government shutdown. It will probably be sorted out, but he needs to trim down on the inflated public servant culture that Obama has built.
Market Insight Commentary – Indices
Market Recap
There was good two way trade yesterday as volatility continues to prevail, the equity market is usually a good barometer for both risk and volatility. As equity markets decline, there is naturally a lot more volatility, and this is filtered through the FX market – this can, and has, brought with it a lot of pain. The market sits with a big question to answer, did the market get ahead of itself after an 8% gain in January? I personally think that the market has been ahead of itself for the last 12 months, but in the absence of a major market shock, equity markets always find a bottom. The fact that US indices have not been able to trade below both the trend line and support levels should be a warning sign for the bears.
The GBPUSD was the big surprise yesterday as the BOE was considerably more hawkish than expected and the market raced above 1.4000. The market failed at the 200 hour MA at 1.4070 and the sellers started building offers up there. I wonder if this is smoke and mirrors ahead of Brexit and so I continue to play the range between 1.4070 and 1.3875 in this pair.
The Pavlovian effect has been in full effect over the last week and the commodity currencies have been battered. The good news is that in the AUD and CAD, both pairs are starting to show some slowing momentum and some nice weekly divergence, this usually indicates that there is an opportunity brewing.
Important Economic Data Due Today
11:00 GBP Manufacturing Production
Consensus: 0.3%
Effect: Higher than expected is good for the GBP
15:30 CAD Employment Change
Consensus: 10.3K
Effect: Higher than expected is good for the CAD
15:30 CAD Unemployment Rate
Consensus: 5.8%
Effect: Lower than expected is good for the CAD
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