Weekly Forex Wrap up, April 3 – April 7, 2017
Hi everyone this is the weekly Forex wrap where I will go over the major highlights for the past week and talk about the impact this may have had on the Forex market. If you would like more free info on the Forex markets and what I do then please check me out on my website http://brandonturnerfx.com/
Overall, trading ranges were small and liquidity fairly thin for most of the week as traders were awaiting the coveted NFP report on Friday to find some clear direction in the world’s most liquid currency, the USD.
USD: Non-Farm Employment data come in with a massive miss at below the 100k psychological level at 98k. The initial reaction was to dump the dollar as you would expect. However, the market chose to focus on the positive Average Hourly Earnings and the unemployment rate dropping to 4.5% from the expected 4.7%. The dollar buy the dippers were in full force for the rest of Friday. One bad report does not change the big picture fundamentals and the initial spike lower on the headline provided a nice price for the big boys to get long dollars. Before the report there were some concerns that the brutal weather that hit the North East US last month would impact jobs and it appears that it did so the headline was considered temporary and transient.
JPY, Gold, Oil: Thursday safe haven flows were evident because of geopolitical tensions when US President Donald Trump ordered the launching of 59 Tomahawk missiles from two US destroyer ships at Syria’s Shayrat airfield which was recently used to launch a chemical weapons attack on civilians by Bashar al-Assad’s regime. It doesn’t matter who you are, if you use chemical weapons of any kind you are deemed scum by the rest of the world and someone will punish you. This caused the Yen and gold to rally on safe haven flows, and oil to rally on supply chain disruption fears.
Geo-Political: Tensions between the USA and Russia were in the spotlight Friday, following overnight reports of the US firing Raytheon’s tomahawk missiles on Russian ally, Assad’s territory in Syria as a repercussion for the use of chemical weapons and killing over 100 people. Basically, Russia is ticked off because they are the ones supplying the ammunition and aircraft to Syria. Hey Russia, you get to sell the scum bags more weapons now so what are you whining about. To me this is a perfect opportunity to get the propaganda machine moving as it puts some distance between the Trump administration and Russia whom have obvious ties to each other.
CAD: The Canada Employment data blew away analyst expectations yet again by posting a massive beat with most jobs being created as full-time jobs. This shows the heavy foreign investment, particularly in the construction sector as cities such as Toronto are in the midst of a very serious real estate boom. Even though we have seen positive data out of Canada we still have uncertain oil markets and a cautious Bank of Canada which is keeping prices fairly range bound for the CAD.
China and America: US President Trump stated that he developed a friendship with Chinese President Xi and thinks they will have a “very, very great relationship” in the long term He also cracked jokes “so far have gotten nothing, absolutely nothing” in talks. Basically this was a non-event as both sides played the role of smiling face while feeling each other out. There was nothing accomplished in terms of economics between the two powerhouse countries.
GBP: Overall, we have seen a positive tone in the Pound after the market finally did not need to care about the triggering of article 50 anymore, that is now done and out of the way. However, it seems that the weak Pound is starting to show signs of problematic inflation as household incomes and rising prices for manufacturers are making the case for no rate hike anytime soon.
AUD: Australia released its official Cash Rate announcement and Rate Statement. The RBA left monetary policy unchanged as expected with the Cash Rate remaining at 1.5%. They stated that the ‘pickup in inflation is expected to be gradual and that China faces medium term economic risks, and that AUDUSD appreciation will complicate the economic transition’. The market took the comments about China as a negative and sold AUD in accordance….but this is exactly what the RBA wants. Also, rising copper prices have kept the downside in AUD limited.
If I have used any abbreviations for certain economic data that you may need further clarification on try checking out my economic calendar. You can click on any news event and it will give you a full description of what it means and why it’s important. Doing this is a good self-study practice and will sharpen your skills and understanding of the Forex Market.
Happy trading next week and I hope you bank some good pips.