Trader Talk

USDX: 93.10

Dollar Index reflected the uncertainty around the USD sentiment currently.

The US Tax Reform story seems to be gaining ground and the US GDP data was revised higher at 3.3%, as USDX hovers around the 93 level.

This can still fall over at the next stage, but in overnight trade for USD index, we saw a lift from 92.90 levels to 93.35 as markets took this move forward as Dollar positive.

Expect tighter ranges until the Tax Reform progress/vote becomes clear.

USD JPY: 112.00

USDJPY was solid on the back of the GDP revised data hitting the newswires.

The bullish momentum seen in the USD moves overnight can be attributed to the lack of clear opposition to the US Tax Reform plan, which can move to a huge bull run higher in USDJPY.

The focus was also on the comments from new Fed Chair Janet Yellen this morning in the US Session, who spoke in relation to the US inflation target.

For that reason, expect a consolidative move around the 111.80-112.30 price range today, looking ahead for the bigger direction and momentum breakouts if the US Senate can pass the Tax Plan, this calendar year.

EUR USD: 1.1860

Euro slid back to the 1.1820 price point as the USD was Bid in the US & London trading sessions overnight.

There is the possibility of the US Tax Reform progress next week spurring a huge spike in EURUSD either way, meaning 1.17 is possible to break down if the Bulls rush into long USD positioning.

I expect a breakout later this week or next, however, in the meantime, a likely holding pattern around 1.1850 seems obvious, before a move back under 1.1650.

I am bearish the EURUSD pair as the Tax Reform story gathers pace.

GBP USD: 1.3455

Sterling is supported by Brexit progress and is the major FX pair leading the pack currently.

Essentially the UK have agreed to the huge Euro based divorce settlement figure, but we need confirmation from the EU side to see a run up towards 1.36, as I have been saying for 2 weeks now.

GBPUSD for mine is still the strong trade of this week ahead so I maintain that bullish target.

The GBPUSD is crawling higher but still needs a big positive Brexit headline to jolt above 1.35 and on towards 1.36, which is how I can see this coming fortnight playing out.

AUD USD: 0.7585

The Aussie jumped under 76c and dipped to new recent lows around 7550 before getting a mild uptick China PMI data on the3 Asian market open today.

The AUDUSD stall at 76c seems like it wants to punch lower but support has formed, and the slide has stopped for the time being.

The risk-off potential of the US further pressuring China to cut off the Oil supply to North Korea will hurt the risk appetite and the AUDUSD, so look for another turn lower in the coming week.

The Aussie 2-year SWAP spread has turned negative so expect the selling to resume for AUDUSD, so expect the Aussie to trade back towards 7450 without too much effort.

NZD USD: 0.6840

The NZDUSD took a tumble lower this morning as the ANZ Business Confidence numbers were off, NZD coming back from 6950.

The grind higher was supported by the Financial Stability Report yesterday, but the USD strength overnight hit the Kiwi before the Biz confidence landed today anyway.

The Kiwi range should maintain 67.50 – 69c to close off this year even with the US Tax Reform story looming large over the US Dollar sentiment and will likely drag the Kiwi-Dollar much lower.

USD CAD: 1.2855

Dollar-CAD strongly Bid higher, in a USD bull move as the positivity hit the headlines surrounding Tax Reform moving to the US Senate.

There are huge risks this week in store for CAD as the Friday data is firstly met with big moves likely in the OIL price, and the slide lower supported the CAD selloff overnight.

OPEC are possible set to confirm a 9-month extension to the Oil Production cuts, but that needs to be clear otherwise it will disappoint the Oil markets and USDCAD will lift towards 1.2950.
Strong bullish bias now in play.

VIX: 10.70

US Stocks were lifted by Financials overnight, again, but generally unchanged.

VIX lifted mildly higher but is in a holding pattern ahead of the US Tax Reform progress headlines.

This is set for a break very soon, so look for much bigger trading ranges in the coming fortnight.

GOLD: $1,285

Gold tumbled back sharply from 1296 to 1282 amid a USD buying spree in the US Session yesterday.

The trading range for Gold has done a reset lower and may break down below 1280 if more hints of lack of opposition to the proposed US Tax Reform flow through our newswires.

This can go either way, so be nimble, but I prefer the upside on a possible USD disappointment out of the US Tax Reform story, which I just cannot see passing in its current form, but anything is possible.

OIL (WTI): $57.45

Oil is holding just under $57.50 ahead of the OPEC plans for 2018 production cuts.

I maintain bullish bias for WTI looking for a breakout to $60 but needs a positive result & headline from OPEC to support another leg higher.

Price action suggests that we may consolidate around the $58 level for now, still looking to spike higher to end this year towards $60 or even higher with Crude Oil Inventories this week as well as OPEC.

BITCOIN (BTC): $10,500

Bitcoin has crashed higher, slamming through the benchmark $10,000 price barrier yesterday and carrying on to $11,400, as I called.

The CME Futures coming hopefully next month is complimented by the NASDAQ also announcing that they will offer Bitcoin Futures products in the first half of 2018 – supporting this furious rally.

The Futures market starting not only adds legitimacy, but will see the money flowing into Bitcoin shift from Retail speculation to the institutional side.

Crypto investors saw profit taking sharply move Bitcoin back off highs this morning (back down) to 9200 before bargain buyers stepped in again, resuming the + $10k price level.

Look for another run up towards $12000 to end this week.

Macro Themes in Play

• Janet Yellen remarks on Inflation and US Tax Reform Story gathers pace
• GBP Lifts quickly as Brexit headlines roll through
• Gold back off highs amid USD Bids, Bitcoin aiming north again