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Most market participants, including myself expected another very quiet day as the US winded down toward a long weekend. There was no underlying reason to expect a move as big as what we saw, but it seemed as the dollar got dumped for most of the day – it was a slow steady move at first, but then become a little more hastened after the FOMC minutes were released.
The EURUSD climbed steadily from 1.1720 through to 1.1840 late last night, the pair found first resistance at 1.1800 but it wasn’t long before the pairs traded through it. Like all the major pairs today, it looks very attractive to fade this pair but I still feel that last week’s high at 1.1860 could be on the cards – and would also be a more attractive entry point for me.
The USDJPY was in focus for most of the morning session as it traded close to support at 112.00, and major support clusters trading at 111.70 – this is where the 200 daily MA was hovering. Price did get to this level as stops were triggered but seemed to plateau out leading into the FOMC minutes. With the strong correlation between the US government yields and the JPY, this made sense. Late last night we got the break lower and it was not long before the pair traded to around 111.00.
All the major pairs look rather enticing today, but I won’t be trading until next week. The moves are sometimes exaggerated on the back of Thanksgiving holidays, and so I would be inclined to rather look at non-dollar denominated pairs – such as the European indices.
Market Insight Commentary – Forex
In the Zone
- DAX
- FTSE
Market Insight Commentary – Indices
Important Economic Data out today
11:30 GBP Second Estimate GDP
Consensus: 0.4%
Effect: Actual higher than expected is good for the GBP
15:30 CAD Retail Sales
Consensus: 0.9%
Effect: Actual higher than expected is good for the CAD
18:30 CHF SNB Chairman Jordan Speaks
Consensus: None
Effect: More hawkish than expected is good for the CHF
Noteworthy News
- Jamie Dimon last night on the wires stating that there should be negative taxes for the lower income earners.
