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As expected, we had to endure a rather tough one yesterday – not in that there was some volatility but rather in that there was next to zero volatility. I have found that over the years it is far more of a feat to have the ability to stay out of ranging markets than it is to time a trending one and so I am pleased with our results yesterday. The day ahead is a pretty big one in that we are expected to hear something on tax reform, this should in theory provide a healthy dose of volatility. I am still on the fence with regards to the tax reform as I am not sure that it is as good has been touted by the White House and lets not forge that it is has almost been a year and the new administration have yet to be passed in the Senate – this one could be no different.
There was some nice moves in the GBPUSD yesterday, unfortunately it was not really of a technical trading nature, but more political. The Brexit worries have taken somewhat of a back seat of late and we have actually seen a lack of progress on this front. The market is focused more on the British Parliament as it does seem as though PM Mays government is falling apart and we there was another sign in that yesterday in the that we saw another cabinet resignation. Cable traded as low as 1.3075 yesterday before we found some buyers enter the fray, the pair traded to 1.3120 but to me it looks vulnerable at these levels and I am watching to see how sellers react at these prices.
I will instead be watching developments in both the USDJPY and the USDCAD, the CAD has been driven by oil fundamentals this week and with oil looking like taking a breather, there may be some opportunity for the USDCAD to bounce. I look at both pairs in more detail in the morning video.
In the Zone
Important Economic Data out today
15:30 USD Unemployment Rate
Effect: Lower than expected is good for the USD
18:30 CHF SNB Chairman Jordan Speaks
Effect: More hawkish than expected is good for the CHF
- It has now been a full year since Donald Trump won the US election, although the US equity markets have been relentless sine then – it does seem as though a bubble is forming. Attention will now start to focus on how little he has achieved thus far in office.