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Although the market seemed to be quiet yesterday, there were was still some nice two way trading action to be had. The dollar was slightly weaker in both Asia and Europe, but enjoyed a steady bid throughout the New York session and actually ended the day as one of the stronger currencies. The market sometimes does trade in this fashion leading into Thanksgiving holidays and my advice is always to cash in now and take Thanksgiving off.
There was nothing too drastic to come out of the Draghi speech last night, and in fact the developments in Germany probably played more of a factor. After the initial pop higher, the EURUSD found resistance at the Friday highs at 1.1810 before settling last night at 1.1725 – the levels where market opened the week. For now this does look like near term support, I would be tempted to start building some offers should the EURUSD get as high as 1.1800 again.
Cable was relatively robust yesterday and although it did trade as low as 1.3230, it was met with some nice bids up there. It has since rebounded back up to 1.3250, there is news filtering in that PM May is making some headway on Brexit negotiations, and this may go some way towards winning back the confidence of her party. As I have said over the last couple of weeks, I am not buying the “feel good” story just yet and will use any pops higher to re-establish short positions.
Despite the continuation of the moves yesterday, I still have my eye on the commodity currencies, the continued weakness has not been with much momentum and they are all trading with divergence. I will again focus on these pairs making some inroads against the dollar.
Market Insight Commentary – Forex
In the Zone
- GBPUSD
- AUDUSD
- NZDUSD
- USDCAD
Market Insight Commentary – Indices
Important Economic Data out today
11:00 AUD RBA Governor Lowe Speaks
Consensus: None
Effect: More hawkish than expected is good for the AUD
12:00 GBP Inflation Report Hearings
Consensus: None
Effect: More hawkish than expected is good for the GBP
Noteworthy News
- Draghi talked about geopolitical risks and policy disappointment abroad as reasons for a looming market correction. I wonder if by “policy disappointment abroad,” he is referring to US tax reform – that could really set the cat among the pigeons.
