Morning Preview: USD Makes a Late Charge

Morning Lads,

It seems like a broken record, but it was another day and another ‘record’ high in US stocks. The SPX ground a little higher, while the USD made a late charge up.

There was some talk around that US President Donald Trump is taking a close look at Economist John Taylor to be the next Chairman of the Federal Reserve. Taylor is a known hawk, meaning he would be keen to see interest rates higher in a bid to stamp out too much inflation. If we get any traction that might mean more strength to come into the USD.

As I said yesterday, the USD looked like it was going to hold up at the 93.00 support level on the US Dollar Index (DXY) and sure enough, it did. Looking at the chart again, by holding that level, it might mean that we have room to push all the way up, through 93.50 to 94.00. If that was to happen that is bearish for the majors.

US Dollar Index (DXY) – 240 min Chart.

The majors all lost some lustre on Monday and there might be some more to come. Today I will be looking closely at the AUD as the RBA minutes are due for release. The AUD/USD gave back most of its gains from Friday and is again looking bearish.

Quick Thoughts

AUD/USD: Bearish ahead of the RBA minutes.

USD/JPY: 112.00 has held up reasonably well. Perhaps the start of a bigger up move.

NZD/USD: Double top on the 4-hr chart. More downside to come.

Top Economic News

Tuesday

NZD – CPI

AUD – RBA Minutes

GBP – CPI

EUR – German ZEW & CPI

Wednesday

GBP – Average Earnings

USD – Building Permits

Thursday

AUD – Employment

CHY – GDP

USD – Philly Fed

Friday

CAD – CPI & Retails Sales

USD – Existing Home Sales

ABOUT THE AUTHOR See More

Rowan Crosby

Asia-Pacific Analyst

Rowan Crosby is a professional futures trader from Sydney, Australia. Rowan has extensive experience trading commodities, bonds and equity futures in the Asian, European and US markets. Rowan holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.

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