Trader Talk Tuesday

USDX: 94.45

Dollar Index took a hit as US rates were Offered in US session dealing after news of Indictments for Trump’s campaign manager.

This political upheaval will hurt the USD sentiment this week leading into Wednesdays Tax plan progress announcement.

The new Fed Chair is likely to be announced on Thursday as Jerome Powell and possibly spiral more USDX pain too, as USD profit taking after last week’s rally may occur.

Friday’s jobs data may save the USD but don’t be too sure.

USD JPY: 113.10

Dollar-Yen again holding around the 113 handle after a mild sell down in USD across the board on Monday.

USDJPY found support at 113 after a brief dip below in the Asian session today.

Bank Of Japan is out later this afternoon with their policy plan, so expect a potential trading range of 112.70-113.30.

The Tax Reform plans likely to roll out midweek will be pivotal for USD sentiment this week ahead, more so than the NFP on Friday.

EUR USD: 1.1650

Euro traded higher to start this week as the USD softness played out in this over-sold pair from last week.

The LONG EURUSD trade seems to have been quite unwound last week, so scalpers my jump back in LONG EURUSD if they want to speculate on softer USD this week, but high degree risk included in that trade.

I am certain that the USD will be in the driver’s seat this week for EURUSD, so it’s all about the US Tax Reform news, Fed Chair announcement and of course, NFP data on Friday in the US Session open.

I called a move back to 1.1680 in the easyMarkets Weekly Outlook video yesterday, and that target seems likely in the near-term.

GBP USD: 1.3200

Sterling showed some snap-back strength yesterday lifting from lows after last week to get back to the 1.3200 handle.

Remember we are likely to see a Bank Of England rate hike this Thursday so the potential for a snapback is very high towards 1.3260-1.3300.

Overall the GBPUSD looks very heavy but leading into a rate hike I prefer to buy GBPUSD, particularly at these lower levels around 1.3180.

The 1.3260 level will be pivotal this week, note that down, and watch the headlines for USD on Wednesday to move this pair and all other Major USD pairs.

AUD USD: 0.7680

The Aussie found steam higher yesterday but the softer China data on the Asian open today dragged it back from the 77c level.

I think Buyers will step on even if we see Powell announced as the new Fed chair, and the AUDUSD recovers 7730-7750 price levels.

There are a lot of chances this week for USD disappointment and we saw the start of that overnight with Team-Trump running into political dramas.

NZD USD: 0.6855

The NZDUSD is under pressure and still looking very heavy, now firmly under 69c against the Greenback.

The geopolitical risks to the NZD are large but 6850 should be a supported price area. That proved correct as the Kiwi lifted mildly yesterday, but swung back negatively this morning.

I am not convinced that selling at this level is wise because if we see some profit taking on LONG USD trades, NZDUSD will bounce higher, ripe for a bounce on ANY US Dollar weakness this week.

The NZDUSD is likely to find support around 6850 and trade in a narrow range until we see USD side data, this week, but lower lows are also very likely over the next 3 months, so I love the Long AUDNZD play for a run to 1.1330 purely on a Divergence trade play.

USD CAD: 1.2840

Dollar-CAD provides a big opportunity this week in my view, as the USD find more and more Bidders with the US Tax Reform gathering pace. The USD is on a knife edge, but as a mid-term trade horizon, the USDCAD looks bullish.

That played out beautifully in US session dealing last Wednesday night as the bank Of Canada held their interest rates at 1%, lifting USDCAD sharply.

I can see a move to 1.2890 but after that I am looking for 1.3000 on this pair, noting that we have commentary this week for BoC speakers as well as the Oil rally that may hold USDCAD down.

Over the mid-term it still looks a great trade up to 1.3000.

VIX: 10.50

US Stocks took a tumble overnight when negative news hit the press regarding Team Trump and the Russian Probe.

Is this the catalyst for a move sharply lower in US Equities & Snap higher in VIX?
Very possible.

Look for a breakdown in stocks before year-end, possible a large correction in my view.

GOLD: $1,276

Gold took off and traded up to $1,280 which was a level I have been calling recently

If the hawkish incoming Fed chairperson is appointed, namely Taylor, we may see Gold back at 1250, but with Powell the favourite, Gold should hold around 1280 levels.

That creates an opportunity this week if the NFP data disappoints for the USD bulls.

Expect a volatile week ahead for GOLD with 3 key risk factors around the USD sentiment coming our way.

OIL (WTI): $54

Oil took off (higher) last Friday amid Iranian exports plunging, as I called towards the $55 level.

Price action suggests that a new support base at $53 will help Oil prices lift again, towards $55 or higher before profit-taking kicks in.

The range for Oil may reset to $53-$57 depending on this week’s Oil Inventories data release & month-end positioning in the Futures markets.

There was Bullish price action overnight, finding a base above $54. I like this to keep pushing to $55 potentially this week.

BITCOIN (BTC): $6,150

Bitcoin found solid upward momentum last night, taking a leg up above the $6,000 marker and seeing a high around $6,300.

“A run up to $6,250 to finish this week is what I can see based on price action in BTC.”
That comment from Friday proved to be Spot-On.

The momentum has switched to be strongly bullish again after the midweek lows on the back of the Bitcoin Gold fork, so look for $7,500 by year-end.

The easyMarkets MetaTrader 4 platform now has Bitcoin!
Stay nimble as pullbacks intra-day are also likely after a jolt higher.

Macro Themes in Play

• Fresh Political worries hurt USD and US Equities
• USD Sentiment driven by Tax Reform & New Fed chair speculation this week
• Bank Of England expected to move on rates, then focus shifts to NFP Friday