USD consolidates as Bond yields rally

USD consolidates as Bond yields rally

Today’s focus turns to NZD, AUD & GBP

The USD Index continues to consolidate around 89.50 as US treasuries start to rally again which suggests higher FED rates are on the way and that should mean a higher USD.

But the USD is struggling to gain any upside momentum just at the moment but that should change as various ‘Trump generated’ geopolitical issues fade.

Sterling took a solid belting after CPI data came in weaker than expected to take GBPUSD from 1.4270 down to a 4 day low of 1.4170. The weaker UK CPI means the speed of future rate hikes beyond next months expected hike will be slower than expected.

The Canadian dollar dropped unexpectedly as the BOC stated their concerns about global trade agreements and the impact any changes would have on the economy. They still mentioned they would need to hike rates but when is anyone’s guess. That saw USDCAD rally from 1.2550 up to a high of 1.2660, taking out large stop-loss orders above 1.2630 along the way.

Today the action is going to be centered around the NZD and GBP yet again.

We have key NZ CPI data due first thing today. It’s the number one focus for the central bank so it will impact if there is variance. But beware it’s a very illiquid event and comes with serious volatility.

The Aussie employment data is also a heavy hitting number and usually provides plenty of potential on the AUD and AUD crosses.

There is no rest for the wicked and Sterling is back in the frame. This is the third release in consecutive days. The first two have been weak so if this too is weak, then we may see GBP back down around 1.4000.

Check our Next Best Trades Watchlist for full details as to which specific pairs we are focusing on.

Asian Session

It’s going to be an active session for both the AUD and NZD with two big releases scheduled.

First, up will be the NZ CPI. This is an important yet volatile release. The RBNZ will be watching closely and if there is any significant variance you can expect the NZDUSD to run aggressively.

Following that a few hours later is the Australian employment data. This too is high impacting data and with the AUDUSD floating around at the moment it may provide clear direction for at least today.

European Session

Once again the focus will be Sterling as we have UK retail sales due. The good thing is there are no other European releases to distract traders.

Remember this is the third major release in as many days. The first two were weak… so the third, if it’s weak, may be the straw that broke the camels back.

It’s going to be extremely interesting to watch and potentially trade.

North American Session

We’ve got a pretty mellow session ahead, although we do have a few numbers to run with.

The USD has spent all week consolidating around 89.50 and most US data this week has been slightly stronger, which has seen US Treasuries rally.

At some stage, the market will react, so I’m thinking if this data is strong we may finally see the USD edge higher toward 90.00.

If the USD can get some clear direction then trading the majors is going to be a hell of a lot easier!

It goes without saying keep an eye on the news wires for random Trump tweets or comments.

Technical Set Up – What’s Happening with the Majors

USD consolidates as Bond yields rally

Today’s Fundamental Drivers

USD consolidates as Bond yields rally

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance with your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..see you in the 247 Trade Zone!

Brad

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