Monday Market Update

USDX: 94.75

Dollar Index moved towards key 95 levels but found strong resistance and turned back slightly to end last week.

This week will be pivotal particularly with the string forecasted numbers for the US Non-Farm Payroll data (Friday) but also the midweek news likely to reveal progress on the Tax Plan.

Bear in mind also re USDX, we are likely to see Jerome Powell announced by President Trump as the new US Fed Chair, which can be Dollar soft, but good for US Stocks.

Look for possible corrections back to 93.50 this week.

USD JPY: 113.80

Dollar-Yen again trading below the 114 handle in a heavy data week ahead, culminating ion Fridays Jobs report for the USD.

USDJPY got a lift on Friday’s Trading Sessions through to 114.40 but ran into resistance firmly and turned back.

Bank Of Japan are out tomorrow with their policy plan, so expect a quiet trading range today in USDJPY around the 113.80 level.

I am confident that we may see 114 appear again but the markets need a catalyst to break that key level at 114.40 for a move into 115.

EUR USD: 1.1600

Euro traded back sharply from 1.1830 to 1.1600 as ECB’s Draghi announced cautious tapering of Eurozone QE.

The lower for longer mentality is Euro negative, and has seen a sharp reset in EURUSD positioning particularly as Traders digest the QE timeline after last week’s ECB press conference.

The LONG EURUSD trade seems quite crowded, but with a soft open today just under the 1.16 level, we may see a drift towards 1.1580 in a quiet Monday before German data on the European open later.

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.

GBP USD: 1.3125

Sterling was wild last week seeing highs towards 1.33 before collapsing back to 1.3150.

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.

Overall the GBPUSD looks very heavy, but leading into a rate hike I prefer to buy GBPUSD, particularly at these lower levels.
The 1.3260 level will be pivotal this week, note that down.

AUD USD: 0.7670

The Aussie slammed under key supports last week but found a base around 7620 and bounced back.

The CPI missing expectations was a bit overdone in my view, still not that bad in comparison to the rest of the world chasing elusive Inflation Targets.

So where to next for the AUDUSD this week?

I think Buyers will step on even if we see Powell announced as the new Fed chair, and the AUDUSD recovers 77c.

I would drill down deeper and suggest that we see 7730.

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.

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.

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: 1.2830

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.

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: 9.80

US Stocks traded higher on Friday, notable the NASDAQ after the stellar Amazon results.

The rally in stocks caused VIX under 10 again.

Maybe Trump’s visit to Japan next week will stir up the North Korean issue and we may have the catalyst for a jump in VIX above 13 and Stock market correction (lower)!?

GOLD: $1,272

Gold was Bid back up to 1275 on Friday lifting up off weekly lows around 1263 amid USD strength.

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 $52 will help Oil prices lift again, towards $55 before stopping.

The range for Oil may reset to $52-$55 depending on this week’s Oil Inventories data release & month-end positioning in the Futures markets.

BITCOIN (BTC): $6,100

Bitcoin found solid upward momentum last night, taking a leg up above the $6,000 marker and seeing a high around $6,200.

“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.

Stay nimble as pullbacks intra-day are also likely after a jolt higher.

Macro Themes in Play

• EURO resting at 1.1600 in the ECB Aftermath awaiting USD lead
• USD Sentiment driven by Tax Reform & New Fed chair speculation
• Bank Of England expected to move on rates, but don’t be too sure.