Trader Talk

USDX: 93.70

USDX is breaking out higher, now Bid through 93.50 solidly.

The USD was lifted on Monday by rising US 10-year treasuries hitting highs around 2.37% during the London session.

The Fed is still expected to lift interest rates in December, which may see higher highs in the Dollar-Index over the near term, towards 98.50, but it may not trade in a straight line, so expect Volatility.

USD JPY: 113.00

USDJPY was capped at 113.25 midweek last week and finished the week softly around 112.85.

The USDJPY story is one with momentum building fast but a breakthrough the 113.50 level need to be cleared before moves higher gain solid steam.

What may bring the catalyst for that move this week?

Interim Non-farm payroll data will be a great indicator of the headline numbers and overall labour market strength readings, which are particularly crucial now that we are in the last quarter and through the worst of the US storms.

Support seems strong at 112.50 and may be tested if that headline data is a miss or we see any crazy Trump tweets about the North Korean issue this week. I still lean towards moves towards 114.

EUR USD: 1.1715

Euro took a hit back towards 1.1700 to start the Asian session today after the weekend violent that rocked the Catalan vote for Independence in Spain.

Traders seem a little concerned more so by the commentary about needing to be cautious with the QE unwind in Europe, which is dragging on EUR quite harshly.

There is still the twin forces of the German election results being a little unclear, plus the big rally in the USD, but the EUR should find support at 1.1680.

I can see a mild move higher potentially after buyer’s step in around 1.1700 or 1.1680 but the swift fall we have seen from last week’s highs do indicate some downside pressure may continue.

The Eurozone geopolitical issues are evident but will subside, so the real drivers here are the stronger USD plus the unknown (exact) timeline from the QE unwind, that will drag on Euro. Buyers love a bargain on EURUSD, so it may be a short-lived selloff unless the Non-farm payroll numbers surprise me.

GBP USD: 1.3250

The Sterling is in a dangerous slide to start this week, crunching lower amid Brexit negotiations dragging on.

The support is being tested at 1.3250 and I fear that a move to 1.3150 will happen this week as we see a run of Tier 1 UK data – starting with Construction PMI data tonight, after the London clients.

BOE Governor Carney did talk up the GBP but it failed to lift the GBP.

That is a large signal of GBP weakness, so the slide may continue towards that 1.3150 area unless the data supports a massive turnaround.

The Daily charts certainly point lower, but anything is possible in NFP US data week for the new month.

AUD USD: 0.7815

The Aussie has seen a gradual slide lower, from 8100 amid the USD strength in the market.

The next moves for the US fed are likely to be a lift in rates in December, and markets have not waited to price that into the fair value of many FX majors, AUD being no exception.

The RBA get the chance today to perform a hawkish Interest rate hold and lift the AUD if they choose to.

I think the RBA will HOLD rates, so the AUD may find its way towards 7780 before bouncing back.

That is not an outrageously wild idea considering it was down 2% last week, touching off lows last Thursday around 7795.

Support and Buyers are likely to hold the AUDUSD level around 7800- 7830 leading into US Non-Farm payroll headline data at the end of this week.

A lot of stop orders may sit around 7750 so will be an interesting week for the AUDUSD.

NZD USD: 0.7180

The NZ elections dragged on the kiwi-dollar sentiment most of last week as some uncertainty surrounded the side deals needed to secure the Government.

For NZDUSD we have seen a break below 7200 hold to start this week, which is an ominous sign for Kiwi, in the short-term.

Yesterday it wiggled around both sides of the key 7200 handle, but this week will be more pivotal, with the headline US jobs data in focus.

NZDUSD is likely to benefit and get back up off the canvas when the Election results are clearer, but in the short-term, it seems that this pair is getting Offered because of the USD strength in the market is high.

Ranging between 7250 and 7160 looks likely in the coming week leading into key US jobs data next Friday.

USD CAD: 1.2530

Dollar-CAD has powered through the 1.2500 handle in a bounce that I called back around 1.2200 after the first BOC rate hike.

The Oversold nature of this pair is enormous, so the USD buyers are getting positioned in this pair, with more upside possible this week.

The Gold price slides lower as the USD rises, which also hurts the Cad, accelerating the lifting of the USDCAD FX pair.

The FOMC delivered for the USD bulls so USDCAD lifted towards 1.2500 but now we are focused on the US labour market report to see if resistance at 1.2550 can be clearer.

If we see a miss in NFP data on Friday that will help support a turnaround back towards 1.2400.

I prefer to play on the long side of USD this week, so look for 1.2600 or even higher particularly as the FOMC & Janet Yellen may once again, lift the USD, leading into NFP, setting the backdrop for more buyers potentially to step in.

VIX: 9.45

The volatility index is holding stubbornly under that 10 level, which is normally a great signal of big breakout moves to come.

Janet Yellen has highlighted this week that the Fed are on track to lift rates again for the US in December, but the fear gauge seems more interested in the progress of Trump and his Tax reform plans.

I am still in favour of the markets turning on this Trump trade – which means selling out of this enormous Stocks rally towards the last quarter of this calendar year.

We are now into the last Quarter, so look for moves in US Equities possibly fuelled by profit-taking after the rally again overnight seeing VIX lower, US equities Higher!

GOLD: $1,270

Gold has slid lower the last three trading days amid USD renewed strength and the markets shrugging off the continuing war or words from the North Korean issue.

I would prefer to say that the USD will win this battle thus crunching lower lows for Gold over the coming week. To what levels? Possible towards 1266 and then settle down, or bounce back with covering before US payroll data.

The positioning in GOLD levels will change over the coming few trading days as we approach NFP’s, so watch for a move back to 1280 in case hedging occurs for a weaker US Payroll data number this week.

We can never write off more NoKo headlines dragging Gold back up towards 1300, always possible too.

OIL (WTI): $50.50

Oil saw a big turnaround and profit taking, to slide back off last week’s highs overnight.

How the Turkey situation plays out will be key in the short-term for Oil, but I still favour moves above $52 to form a base for a potential drive higher in prices.

Now that we have seen a rest under the $51 price, Oil will look towards US Inventories data for sentiment & direction this week.

Will the buyers step in at 50.50 looking for another run up above $52?

Quite possibly Yes.

BITCOIN (BTC): $4,415

Bitcoin has traded strongly through the weekend to get back above the $4400 level.

Quite a bullish signal back in this market as traders shrug off the recent negative headlines about Bitcoin exchange bans in China & South Korea.

Where to from here?

Momentum looks solid again, on the Upside towards $5,000.
That seems like a huge call, but not with this market, buyers love a bargain.

Bitcoin is trading LIVE now on the easyMarkets proprietary Web platform, so your live charts will display all of the usual goodies for technical analysis.
Be careful, not for the faint-hearted.

It can moves higher as more banks start to come on board with research as to how they can deliver a Coin solution for the growing potential demand.

Macro Themes in Play

• USD Bid strongly higher, looking ahead to NFP Friday
• EUR dragged lower sharply amid Geopolitics and QE unwind uncertainty
• BOE Carney tries to talk up the Sterling, but fails. GBP trading sharply lower.