Market Action

USDX: 94.40

Dollar Index pulled down from 94.70 after the FOMC held steady.

The new Fed Chair is likely to be Jerome Powell and possibly spiral more USDX pain too, as USD profit taking after last week’s rally may occur, plus the bigger theme of him being quite Dollar neutral.

The big story is the first phase of US Tax Reform is set to be released Thursday also, so watch for bigger trading ranges on both sides for USD.

USD JPY: 113.85

Dollar-Yen lifted to 114.20 highs in overnight trade, then crunched back after Jerome Powell announced as likely new Fed Chair hurt the USD sentiment.

This soft USD opening in Asia open trading today is positioning leading into what is set to be a big US payrolls data number on Friday.

USDJPY eased back off 114 to sit back at the familiar 113.75 level as the big forecasts for US data leave the door open for the markets to be disappointed, as I have been saying all week.

Bank Of Japan did not rock the Yen outlook boat at all on Tuesday, as anticipated by most dealers.

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.

I am bearish USDJPY looking for a swing low towards 112.80.

EUR USD: 1.1660

Euro traded very quietly on Wednesday but lifted in early Asian dealing today as the USD softness played out across the board.

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 (as a ceiling) in the easyMarkets Weekly Outlook video on Monday, and that level looks like a hard resistance level, ahead of these risk events to follow.

Expect big volatility in EURUSD over the NFP Friday or Tax Reform headlines so the range will be widened to 1.1700 – 1.1550.

GBP USD: 1.3290

Sterling showed some snap-back strength yesterday lifting from lows after last week to get back to the 1.3300 handle, then it sold down over the FOMC news.

Remember we are likely to see a Bank Of England rate hike tomorrow, so the potential for a move towards 1.34 is on the table.

The 1.3260 level seems to be a solid support ahead of the key US data this evening, so this grind back to 1.3300 before the Bank OF England is bullish positioning, in case the BoE are hawkish in their GBP outlook.

I think a whipsaw move to 13400 is very likely but the chances of a reversal are very high afterwards.

AUD USD: 0.7715

The Aussie lifted above the 77 handle again today on the back of the stronger than expected Aussie Trade Balance data.

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

I stand by that comment from yesterday, and it should easily play out that way today now that we have a supportive AUD Trade Balance numbers.

There are a lot of chances this week for USD disappointment, but the focus now shifts to the headline US Payroll data and more details regarding the US Tax Reform.

NZD USD: 0.6930

The NZDUSD got a solid lift back up above 69c against the Greenback after the better-than-expected NZ Unemployment (improving to 4.6%) yesterday and soft open in the USD today.

The geopolitical risks to the NZD are large but 6900 should be a supported price area.

The NZDUSD is likely to find support around 6900 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.

USD CAD: 1.2835

Dollar-CAD lifted sharply back to 1.2920 after the Canadian GDP data missed the target this week.

Over the mid-term it still looks a great trade up to 1.3000, but it has stalled mid-flight here around 1.2840 as the USD was really Offred sharply in the Asian session to kick off today’s trading.

This pair is now at the mercy of the USD Sentiment, so it Can get to 1.2750 if we see a large USD disappointment, or likely 1.3000 if the NFP data is as Strong as the banks are forecasting.

VIX: 10.20

US Stocks are holding up firmly this week ahead of the hugely important US Tax Reform agenda rollout.

The Volatility Index is holding around 10 but let’s see where it is end of November, as big moves are getting more and more likely by the day.

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

Stocks should get a lift, holding back the VIX now that Powell will be the new Fed Chair.

GOLD: $1,280

Gold back to $1,280as I said it would due to Powell being quite Dollar neutral.

Price action on Tuesday seems fair value to me, as we are staring at a LOT of uncertainty around the USD outlook/sentiment this coming week.

That creates an opportunity this week if the NFP data disappoints for the USD bulls.
Expect a volatile week ahead for GOLD and breakouts may start as early this evening on the Interim US payroll data release.

OIL (WTI): $54.35

Oil ran into headwinds at the $55 marker as the rally fizzled.

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 $54.50. I like this to keep pushing to $56 potentially.

BITCOIN (BTC): $6,800

Bitcoin is a huge tearaway this week, hitting $6,900 this morning as the CME Group announced that Bitcoin (BTC) Futures will trade as early as next month!

ETF for Bitcoin is also coming soon so my call of $7,500 by year-end is very much in play, after getting over the hurdle at $7000 firstly.

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

• Fed Chair will be Jerome Powell, USDJPY lifts back to 114
• Bank Of England expected to move on rates
• USD Sentiment mixed with Big forecast for US Payrolls