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Daily Report

Jan 5th, 2018: Tax Cut Optimism Fails

Morning Report: 07.00 London

This morning, the US dollar has a positive bias, but the damage was done yesterday as tax cut optimism reversed.

This was good news for dollar pairs has they climbed across the board. The NZD/USD led the pack with solid gains, while the AUD/USD continued its winning run. The latter is performing poorly this morning though.

The EUR/USD performed well, reversing all of Wednesday’s losses and is performing well this morning. The GBP/USD is outperforming this morning after lagging these last two days. The EUR/GBP is dipping lower as a result.

The USD/CAD has continued to slip lower as the Canadian dollar is fed by higher oil prices and the US dollar weakens.

The yen pairs are lifting higher, led by the EUR/JPY which is continuing its excellent run.

Gold is slipping back this morning after a solid recovery yesterday.

Coming up today

Coming up today we European have CPI flash estimate at 10.00

At 13.30, we have the day’s main event – US Non Farm Payrolls. At the same time we get average hourly earnings and the unemployment rate.

Canadian employment data is released at the same time.

At 15.00, we get US ISM non-manufacturing PMI, with Canadian Ivey PMI released at the same time.

FOMC member Mester speaks at 17.30.

Trade Idea

Stepping back and looking at the longer term, the EUR/JPY has maintained a winning run since September 2016.

It could pay to bet on further upside from here.

Jan 5th, 2018: Tax Cut Optimism Fails

A good way to play this is a HIGHER trade predicting that the EUR/JPY will close above 138.00 in 90 days for a potential return of 122%.

Jan 5th, 2018: Tax Cut Optimism Fails