Trader Talk

USDX: 93.95

Dollar Index was rangebound to start this week, as the US 10-years were unchanged around 2.38%.

The headline US Payrolls data (on Friday) is likely to be an excuse for the Dollar buyers to step, even though this week the very well telegraphed/priced in rate hike.

Expect more Dollar buying to see a push for USDX towards 94.50.

USD JPY: 112.50

USDJPY was very, very quiet on Monday, across all three trading sessions amid a blank data & event risk calendar.

US 10-year treasury yields remain around 2.38%, flat from the close on Friday after the monthly payroll data was digested by Traders, supporting an aimless trade pattern in USDJPY.

I think the USDJPY pair can find its way back above 113.80/114 this week when we get the CPI release in the US session on Wednesday, just before the Rate Hike.

I have a revised (higher) near-term target of 114.50.

EUR USD: 1.1770

Euro lifted all day Monday, getting Bid up to 1.1800 before turning lower again.

This week marks another ECB meeting but that is after the US CPOI & FOMC likely US Rate Hike.

Euro may see lower lows towards 1.1700 if the USD strength plays out the way I am seeing it currently.

I am maintaining my outlook towards 1.1680-1.1700 range for EURUSD in the near-term.

GBP USD: 1.3340

Sterling had a strange week last week, firstly Bid up to just above 1.35, before the USD strength brought it back to Earth.

Watch for the GBPUSD volatility this week ahead particularly around the inflation data release.

I maintain my target of 1.3600 for GBPUSD particularly if we get agreement on the divorce from EU payment from the UK, but that lingering negotiation did hurt the Sterling late last week, as markets were expecting more.

AUD USD: 0.7530

The looks very heavy around the 75c level despite getting a lift on the Asian open today, with no clear catalyst.

The downslide has firmly continued, and certainly seems the dominant trend, with only a mild bounce in sight for AUDUSD and AUD cross FX pairs, such as AUDNZD.

I favour the downside on AUDUSD to end this week around 7450 as the US move on rates this Wednesday plus we have Aussie Jobs data on Thursday.

The Aussie Jobs data, including unemployment, would need to be a huge number to stop this downslide.

I maintain my ideas around 0.7450 looking very likely in the coming weeks as the divergence is in full swing, on AUD weakness Versus US Rate Hike.

NZD USD: 0.6930

The NZDUSD came alive after a quiet Monday, as the news was confirmed new RBNZ Governor Orr.

The NZDUSD climbed very sharply off sideways trade at 6840 to 6925 on the back of this newfound optimism around the Kiwi outlook.

Maybe this pair can play out a run towards 70c, but that momentum is likely to be capped at the 0.700 handle this week.

USD CAD: 1.2850

Dollar-CAD trading plain sideways like a rally-car to start this week even though Oil lifted back up above $58.

The supportive Oil price recovery was balanced by the Gold price selloff, so USDCAD remained at 5 pips either side of 1.2850.

The Bank OF Canada held interest rates last week but also noted some Cautions tone, hurting the CAD sentiment – hence USDCAD shot up above 1.2800 once again.

We may find a base here around 1.2850 for a move towards 1.3000 this week on the back of USD strength, very likely.

VIX: 9.34

US Stocks holding up very well this year, and in overnight US session trade US equities were again solid, pulling VIX lower still.

The year-end volatility potential is always high, but Friday saw a 4% drop in VIX/ Volatility as the fear index slides under 10 again.

For too long this year, Stocks have seen unbelievable sustained upward momentum, so it can flip back quickly too, but needs a solid catalyst.

GOLD: $1,245

Gold did a sharp move lower on Monday amid a clear sell-down pre US rate hike.

Also, the New Jobs added data for the US was supportive of a strong USD and softer Gold price, so we will remain around 1245 until midweek, this week – when the US CPI is released, helping give forward guidance for next ears Rate Hike oath for the US Fed.

The USD is still looking strong, and this slide in Gold may continue to even lower lows in the week ahead, until support is found at 1225.

OIL (WTI): $58.30

Recovered off last week’s low, regaining above the $58 level again.

The US data surrounding Oil Production is weighing on the rally that looked like $60, now it has settled back firmly around $57-$58.50.

Price action suggests that we may consolidate around the $58 level but it can be an unpredictable beast, so be nimble, with my target still set at $60 over the mid-term.

BITCOIN (BTC): $16,100

Bitcoin had a HUGE run up last week, and yesterday marked the start of CBOE Futures trading LIVE.

In a quiet day, it did grind higher to shake off the weekend pullback in price, getting back to $17000 before a reversal.
The CME Futures start next Monday, and will see increased volume in the near-month contract.

For that reason, I can see no stopping this price action until $20,000, even with the intraday pullbacks.

Crypto investors are likely to keep the buying pressure, likely to drive to $20,000 before seeing a profit-taking reset lower.

Macro Themes in Play

• US data in focus this week with US CPI & Interest Rate Hike
• GBP volatile, back to 1.3340, amid ongoing Brexit talks
• Gold slammed back $10 as Copper Recovers, along with Oil higher.