Trader Talk

USDX: 93.50

Dollar Index traded quietly until the unravelling of the USD in relation to the investigation into the US election.

The other unknown dragging on the USD sentiment is the Tax Reform story. Whilst it has passed the first stage, it is still a very big potential catalyst for more USD pain if that fails.

The dollar-index may find support after being crunched lower in the Asian session today.

USD JPY: 112.50

USDJPY is likely to make a run lower still but needs to break key resistance at 112.50 firstly, before heading towards 112 or even lower.

Yen generally offered amid a break in the recent de-risking flows, stocks drop

US data was decent, but USD/JPY fell to late Wed’s 112.73 low
House passed its tax bill, as expected, aiding rates, stocks, USD/JPY

Senate still has to pass its bill & the two houses need to agree on one bill

USD/JPY looks bearish & mid-111.00s bound unless tax bill is signed

EUR USD: 1.1810

Euro back above 1.1800 and looking north very quickly.

I can really see a snap higher and run up above 1.1850 from here as the USD sell down may not be done yet.

Subdued price action due to the pair being buffeted by USD slide & EUR/JPY slide near 132.75.

ECB’s Draghi & BUBA’s Weidman speeches are risk Friday, no major EZ data risks due

GBP USD: 1.3230

Sterling got a lift in early Asian session dealing today as the USD fell out of bed.

Cable found resistance just above 1.32, failed abv 1.3205 three times

UK RS beat & softer Brexit tones, US jobless claims miss keep GBP firm

BoE’s Carney says two more rate hikes likely in coming years
Talk UK may increase Brexit exit payment helped lift GBP, Tusk to press May

AUD USD: 0.7590

The Aussie is basically unchanged but drifting above 76c again with the USD softness being very evident against all of the major FX pairs.

Limited action in NY, pair opens near 0.7590, trades within 0.7580/0.7605 band

Pair basically directionless as it’s buffeted by USD’s slide & AUD/JPY’s dip near 85.50

Longer-term techs remain bearish though & mkt becoming more bearish on AUD

No major AU data or event risks due in Asia

NZD USD: 0.6860

The NZDUSD lifted back to 6885 but has since settled back.

The 6850 price point seems like a very big magnet for the Kiwi, so I expect that level may hold.

USD CAD: 1.2725

Dollar-CAD has come under pressure leading into tonight’s Canadian data as the USD slipped lower.

USDCAD can easily get back towards 1.2650 unless we get a surprise uptick in USD sentiment.

I prefer to look for lower lows in the near-term.

VIX: 11.76

VIX slipped back under 12 overnight despite the market risks that are still unclear.

The US Tax Reform in its current form, it very unlikely to provide a result for Team-Trump, so the potential for US Stocks to give back some of this year’s gains is very high.

Expect the VIX to trade higher looking towards 14 or 15 over the next 5 weeks.

GOLD: $1,283

Gold lifted back from 1277 to 1283 again as the USD sentiment is under pressure. Again.

The extended timeline on the US Tax Reform will add a lot of buyers into Gold – I certainly favour long positioning in GOLD looking for $1,300, over the next 3 weeks.

My Weekly Outlook video for easyMarkets called GOLD (long) as a key trade idea for this week ahead, be patient with this one, as the bullish signs are there, and as Stocks show signs of cracking lower, Gold should fire up.

OIL (WTI): $55.55

Oil is somewhat steady above $55 looking to grind higher, albeit slowly.

Price action suggests that we may consolidate around the $55 level for now, still looking to grind higher to end this year towards $60.

BITCOIN (BTC): $7,920

Bitcoin shot up through $8,000 this morning and then had a pullback, which didn’t last.

Crypto investors have raced into the bargain levels, and we are now aiming for the psychological $10,000 level.

Only a matter of time, or are we set for another correction?

I remain very bullish towards $10,000 price target after the fact that traders have shrugged off the pullback coming on the back of the cancelled Bitcoin fork last week.

Macro Themes in Play

• USD hurt my political jitters and uncertainty
• EUR & GBP sparking up Bids after USD trades very cautiously
• Year-end flow seems to be littered with potential for USD weakness