Trader Talk Thursday

What Happened on Wednesday > Top 3?

• Trump disbanded 2 business advisory councils, hurting USD & US Equities
• December Rate Hike probability drops along with USD sentiment
• FOMC meeting minutes signals a cautious & patient approach to raise US Rates

Outlook

• Aussie Jobs data today in the Asian session
• US Jobless claims tonight after the GBP Retail sales data
• FOMC Meeting Minutes cause USD sell down and Gold rally once again.

Data & Event Risk Today?

• (AUD) Aussie Jobs data & Unemployment numbers – 11.30am Sydney
• (GBP) UK Retail Sales numbers – 6.30pm Sydney
• (USD) US Jobless Claims data – 10.30pm Sydney

USDX: 93.40

The USD was sold down for most of the US trading session overnight as news hit that Trump disbanded his business advisory council amid many CEO resignations.

The FOMC meeting minutes also talked of inflation concerns which fuelled further sell down on USD assets, noticeably seen in USDJPY moving from 110.90 to 110.00 and Gold rally.

USDJPY: 110.00

USDJPY slammed lower from around the 111 handle on the back of FOMC meeting minutes suggesting that the US Fed can afford to be patient in their Interest Rate-hike path.

Dollar-Yen is always the best moving pair, in large and fast trading ranges when the USD sentiment turns, which is exactly what yesterday brought.

I think a drift lower into 109.50 is likely today.

EURUSD: 1.1770

Euro had a quiet Asian trading session on Tuesday followed by a sharp move higher yesterday, fuelled by US 10-year treasuries decline.

The Weekly chart shows a bullish bias and moves to the upside seem like they can drive EURUSD towards 1.2000 over the coming months and specifically we need a break of 1.1800 (in the short term) on the upside to reaffirm the USD sell down benefitting EURUSD.

Strong uptrend remains the Macro theme for this pair.

Look for a target of 1.1835 to be hit very soon.

GBPUSD: 1.2890

Sterling had a great set of employment data out yesterday in the London session, but GBPUSD only moved off its lows of 1.2830 to 1.2890.

A restrained move higher despite the USD weakness.

That signals to me that the GBP is undermined very badly by the CPI (Inflation) Data miss earlier this week, weighing it down.

So how do we trade it? GBP sees Retail Sales data tonight, so look for a move back down to 1.2830 unless that data is very impressive.

AUDUSD: 0.7930

The Aussie dollar Bulls raced into AUDUSD yesterday as news hit of Trumps latest misstep plus the FOMC meeting minutes did nothing to help USD outlook.

We have Key jobs data for Australia out at 11.30 this morning on the Asian market open.

Unemployment for Australia is tipped to maintain the current level so look for weakness after the data hits, driving back under 7900.

NZDUSD: 0.7305

NZDUSD benefitted greatly yesterday as the USD fell out on the FOMC meeting minutes’ release.

The kiwi jumped from 7220 to 7320 before settling back on the 7300 handle.

This looks overbought and ripe for a pull back today, but with the lack of data except for the AUD jobs numbers, this pair will be driven by AUDNZD demand.

AUDNZD now at 1.0850 looking very likely the trade of today to run up to 1.0900 if the AUD jobs data is positive.

USDCAD: 1.2630

USDCAD pulled back yesterday fuelled strongly by Donald Trump’s latest instability.

The end of this coming week sees CPI data for Canada, but a lot can happen before that hits the news wires.

Don’t underestimate the ability for USDCAD to recover back towards 1.2800.

The USD bulls have a habit of pouncing upon any Strong USD data points. This trade story may be more so driven by the CAD CPI tomorrow night to close off the week. I am stubborn on this pair LONG just like I was stubborn yesterday LONG Gold and benefitted greatly for being brave as a hedge.

VIX: 11.74

The Fear index was off again yesterday, moving back under 11.

This move lower on the fear index was driven by Donald Trump’s latest questionable chess move.

Interestingly US Equities are holding firm, but the selloff and downside pressure is building.

GOLD: $1,287

Gold found very strong Bids higher yesterday, beautifully jumping up from 1272 to 1287 as the USD fell off.

Inflation concerns on the FOMC meeting minutes will fuel a move back above 1290.

“I am not convinced totally on this USD recovery, so I re-entered LONG Gold today 1272 for a long-term play above 1300. “I maintain that view from yesterday.

Oil (WTI): $46.90

Oil came back again last night, grabbing offers down to 46.70.

The $46/$48 range should maintain for now.

The US Oil inventories data was interesting last night, but be patient and look to get back in long around 45.50.

Macro Themes in Play

• USD Sells down sharply on Trumps instability
• FOMC meeting Minutes fuel a USD pullback, seen sharply in USDJPY & Gold.
• FX Majors spike higher against the USD except for GBP, which seems capped on the upside, under 1.2900.