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Market Insight Commentary – 15 November 2017

15 Nov
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Market Insight Commentary – 15 November 2017

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A bit of a strange one yesterday, for the best part of the last 12 months the Fed has placed a premium on any form of inflation data. It would be logical that any good inflation data would be supportive of the dollar, the much better than expected data yesterday should have been a clear message that the Fed will probably raise interest rates this year, yet the dollar weakened on the print. The blame is being cast on the falling yields yesterday, it does make sense as the lower yields will naturally put pressure on the dollar – it makes me wonder if the move was a little excessive though and perhaps a strong CPI print today will enable the dollar to rally against those moves.

The EURUSD was the big mover on the day as the pair strengthened by over 1% against the dollar yesterday. The pair broke above 1.1668 as well as the neckline of the now infamous head and shoulders formation at 1.1675. The breaks of these strong resistance levels opened up for some technical breaks as stops triggered the 100 day MA at 1.1733 and only found resistance at 1.1805. The buyers will be hoping to push momentum through to 1.1850 – 1.1860 today, but given the nature of the move yesterday – I would be inclined to look for opportunities to fade this move with a target around 1.1720 – 1.1700.

Cable has been choppy over the last couple of weeks, but the pair was able to break some major technical levels, the most noticeable ones being the 200 and 100 hour MA at 1.3120 and 1.3128 respectively. Price only stalled once it got to 1.3190 but found an immediate wall of resistance up there and traded back below 1.3160. This is the first major hurdle to trade above and it would seem that because of Brexit and the crumbling leadership of PM May, traders are treating any rally as an opportunity to sell.

Market Insight Commentary – Forex

In the Zone

  • EURUSD
  • USDJPY

Market Insight Commentary – Indices

Important Economic Data out today

11:30                                         GBP                                             Average Earnings

Consensus:                             2.1%

Effect:                                        Higher than expected is good for the GBP

 

15:30                                         USD                                             CPI

Consensus:                             0.1%

Effect:                                        Higher than expected is good for the USD

15:30                                         USD                                             Retail Sales

Consensus:                             0.0%

Effect:                                        Higher than expected is good for the USD

 

17:30                                         USD                                             Crude Oil Inventories

Consensus:                             -2.1M

Effect:                                        No consistent effect on the USD

 

12:00                                         JPY                                              BOJ Governor Kuroda Speaks

Consensus:                             None

Effect:                                        More hawkish than expected is good for the JPY

 

15:30                                         USD                                             PPI

Consensus:                             0.1%

Effect:                                        Higher than expected is good for the USD

Noteworthy News

  • The US Senate abruptly ended the tax bill debate yesterday, rumours are that Republicans would like to include another repeal of Obamacare – sounds strange to me, but will monitor this afternoon.