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Daily Report

Markets generally quiet22 October 2018 by Dave Evans

Morning Report: 07.00 London

The dollar index is recovering somewhat this morning after moderate selling on Friday. Markets are generally quiet despite the potential risk factor of Trump removing the US from the nuclear treaty with Russia.

The AUD/USD is making small losses after a positive session on Friday, that saw support around 0.7100 hold. This performance has lagged the EUR/USD which recovered extremely well on Friday with follow on buying this morning. The 1.1450 support level held firm. The GBP/USD is also on the front foot, though gains have lagged the euro. The EUR/GBP is unchanged so far following two days of gains. The medium term trend still remains with the pound.

The USD/CAD is on the back foot, as the Canadian dollar recovers from Friday’s dire retail sales and inflation data. Oil prices continue to slip from the highs made at the beginning of the month.

The USD/CHF continues to nudge higher though, with the parity line now within a day’s session of being breached. The EUR/CHF is rising again as the Swiss franc continues to lose its allure.

The USD/JPY is on the front foot after gapping lower slightly. Other yen pairs are also continuing Friday’s rebound, with follow on buying for the EUR/JPY, GBP/JPY and AUD/JPY.

Coming up today

It is a very quiet day on the economic front today, with RBA assistant governor Debelle speaking at 23.35.

Trade Idea

The USD/JPY uptrend has been meandering, but the general direction still remains higher despite the October pull back. The path of least resistance is still betting on higher US rates and slower changes in Japan, making a higher trade attractive.

October 22th 2018: Markets generally quiet

A good way to play this is a HIGHER trade predicting that the USD/JPY will close above 113.00 in 36 days for a potential return of 124%.

October 22th 2018: Markets generally quiet