DailyFX US AM Digest: US Dollar Firms; Canadian Dollar Awaits Poloz
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After giving back the early gains to finish out yesterday barely changed on the day, the US Dollar is once again nudging higher this Tuesday morning. The DXY Index is testing the key 95.17 level for the second time in as many weeks, which formed as resistance as the high price for the July 20 bearish outside engulfing candle. Given the absent economic calendar yesterday and today, speculation around tax reform legislation and the prospect of it being passed before Thanksgiving (approximately two weeks) have lifted the greenback. Elsewhere, the Australian Dollar has edged lower following the Reserve Bank of Australia rate decision in which there was no apparent shift in tone away from what’s been tilting more dovish in recent months. Whereas yesterday August 2018 was being priced in as the most likely period of the next rate hike, today we see that September 2018 is now the most likely period following the RBA’s November policy meeting.
DailyFX Economic Calendar: Tuesday, November 7, 2017 – North American Releases
It’s a quiet economic calendar out of North America once again on Tuesday, with no ‘high’ importance data releases, and the only ‘medium’ data release coming in the form of September US Consumer Credit – hardly a market moving these days. Instead, traders may want to focus on Bank of Canada Governor Stephen Poloz’s comments starting at 13 EST/18 GMT. The BOC only recently backed away from its hawkish rhetoric, and now markets aren’t pricing in another rate hike in 2017. Given the absence of meaningful drivers today, Poloz’s comments may have an otherwise exaggerated impact on USD/CAD (among other CAD-crosses).
DailyFX Webinar Calendar: Tuesday, November 7, 2017
EURUSD: Retail trader data shows 38.3% of traders are net-long with the ratio of traders short to long at 1.61 to 1. The number of traders net-long is 14.7% higher than yesterday and 11.0% higher from last week, while the number of traders net-short is 7.1% higher than yesterday and 19.9% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
Five Things Traders are Reading
- “DXY Index Nears Resistance as First EUR/USD H&S Target Hit” by Christopher Vecchio, CFA, Senior Currency Strategist
- “Technical Outlook for Gold Price, Oil, Nikkei, DAX & More” by Paul Robinson, Market Analyst
- “British Pound in Demand as Soft Brexit Hopes Rise” by Martin Essex, MSTA, Analyst and Editor
- “Euro Edges Lower After Mixed Bag of Economic Data” by Martin Essex, MSTA, Analyst and Editor
- “US Dollar Rebounds, Eyes Tax Cut Progress for Direction Cues” by Ilya Spivak, Senior Currency Strategist
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