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Market Insight Commentary – 25 January 2018

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Market Insight Commentary – Forex

Today's News Headlines

  • Donald Trump will be the first US President to attend Davos in almost 20 years, it is believed he was encouraged not to attend but he is keen to talk at the event. He won’t be welcomed with open arms but I am certain that he will try and sell the growth story in the US – could be a big market mover.

Market Insight Commentary – Indices

Market Recap

Looking at the charts this morning, there is no other way to express this than it is not looking good for the greenback. From the moment that the White House announced that it would be attending the Davos convention, this week started shaping as a market moving event. The cause of the ruckus in the dollar yesterday were comments from Steve Mnuchin that there were benefits of a weak dollar, there were some balancing comments in the statement, but the market focused on the headline only and the dollar was sent spiralling over the edge.

The EURUSD is going to be the focus today as the ECB braces itself for an interest rate decision as well as a press statement afterwards. Yesterday the pair rose by over 100 pips and is trading at around 1.2435 at the moment, the majority of the move came in the US hours. Looking at the technical parameters, it would seem that the market is bracing itself to trade lower – this would be in line with recent Draghi statements as he has been keen to weaken the EUR in recent months. This makes today a big day, any hint of a change of mood and the EURUSD will soar.

I continue to seek opportunities in the indices this week as I feel it offers a little high probability opportunity, I will continue to sit out the forex pairs and will revisit it next week.

Important Economic Data Due Today

14:45                           EUR                              Minimum Bid Rate

Consensus:                   0.0%

Effect:                          Actual higher than expected is good for the EUR

 

15:30                           EUR                              ECB Press Conference

Consensus:                   None

Effect:                          More hawkish than expected is good for the EUR

 

15:30                           CAD                             Retail Sales

Consensus:                   0.8%

Effect:                          Actual higher than expected is good for the CAD

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