Trader Talk

USDX: 94.57

Dollar Index drifted lower yesterday as the US 10-year yields battled with resistance under the 2.4% level.

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, plus the bigger theme of him being 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 off the base at 113 yesterday (almost getting above 114) as we draw closer to the US Tax Reform plans as well as Interim US Payroll numbers (this evening in the US Session).

USDJPY eased back off 114 to calmly trade sideways on the Asian market start today, awaiting direction.

Bank Of Japan did not rock the Yen outlook boat at all yesterday, 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: 1.1635

Euro traded very quietly on Tuesday which is an ominous sign that a punchy move is ahead when the USD risk events roll out to close off this week.

The LONG EURUSD trade seems to have been quite unwound last week, but EURUSD did lift to 1.1650 before grinding to a halt in the US Dealing session overnight.

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 on Monday, and that level looks like a ceiling ahead of these risk events to follow.

GBP USD: 1.3275

Sterling showed some snap-back strength yesterday lifting from lows after last week to get back to the 1.3200 handle, then it took off to a high just shy of 1.33 with renewed positing ahead of BoE tomorrow.

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.

AUD USD: 0.7660

The Aussie wobbled around but essentially traded lower taking out stops around 7650 yesterday.

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

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, but the focus now shifts to the ADP (interim) US Payroll data.

NZD USD: 0.6900

The NZDUSD got a solid lift back up to 69c against the Greenback after the better-than-expected NZ Unemployment (improving to 4.6%) this morning in Asian session trade.

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 is now at the mercy of the USD sentiment.

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, even after this spike lower today.

USD CAD: 1.2900

Dollar-CAD lifted sharply back to 1.2900 after the Canadian GDP data missed the target overnight.

“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.”

That comment from yesterday stands.
Over the midterm it still looks a great trade up to 1.3000.

VIX: 10.18

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 lets 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.

GOLD: $1,270

Gold back to $1,270 after getting a solid lift on Monday.
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.

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 and breakouts may start as early this evening on the Interim US payroll data release.

OIL (WTI): $54.65

I made a good call on Oil (WTI) back to $55 and we are just shy of that level amid a lot of positive headlines regarding production, this week lifting prices in Oil.

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 this evening if the Inventories data is supportive.

BITCOIN (BTC): $6,435

Bitcoin is a huge tearaway this week, hitting $6400 overnight as the CME Group announced that Bitcoin (BTC) Futures will trade as early as next month!

ETF for Bitcoin are also coming soon so my call of $7,500 by year-end is very much in play.

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 yearend.

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

• Big event risk ahead for USD holding US 10-years around 2.4%
• USD Sentiment is the talk of the street ahead of big event risk
• Bank Of England expected to move on rates, then focus shifts to NFP Friday