Market Sentiment on Trump Inauguration, USDMXN, Brexit & Crude :: 24 Jan 2017

January 24, 2017

Last week was an important event in history as our favourite topic, Mr Donald Trump was sworn in as president of the United States of America.

This, and his subsequent speech, affected the markets as the US Dollar lost roughly 1% of its value over the day.

News Sentiment on Cable, EURUSD and USDCHF, at the moment, shows continuing dollar weakness while Aussie and Loonie are showing the opposite.

Regarding GBPUSD we may have some scope to go long based on News Sentiment but wait for a break through resistance at $1.25. Also, watch out for Tuesday morning’s ruling from the UK High Court on the government’s ability to bypass parliament regarding the enacting of Article 50 on our second favourite topic — Brexit. Also we have quarterly GDP Thursday.

Based on this Bearish indication, and the fact that USDCHF has broken through psychological support of 1 franc, we might want to look at a shorting this. Just watch out for support at around 99 centimes though, where we haven’t been since October of last year.

We have a similar situation on EURUSD except that we are approaching previous resistance from the beginning of December.

Of course in any USD trades watch out for Unemployment Claims Thursday and GDP and Durable Goods orders Friday.

Before placing any trades, be sure to check your favourite economic calendar and be sure to get an update on current News Sentiment and, have a look at the latest market Alerts.

As we mentioned, AUDUSD is fully Bearish on News Sentiment but we need to keep an eye on this as the Dollaroo has returned to a range where it seemed happy to spend most of last year
between 75 and 77 cents. If News sentiment persists at this level we might consider going short but watch out for support at 75 cents. Also, watch out for Wednesday’s quarterly CPI from Canberra.

We can also expect CPI data, Wednesday from New Zealand and News Sentiment is basically neutral on all Kiwi pairs. The charts show mixed results, as well regarding NZD strength but we see Bearish News sentiment on EURNZD and this might be a sensible trade considering we have almost broken through support.

The only other significant news this week is the Crude Oil Inventories due up Wednesday. News Sentiment on both Crude Oil and the Loonie are neutral right now.

We might see some movement on the Canadian Dollar from this and the fact that the current free trade agreement is on President Donald Trump’s hit list.

Of course, the North American Free Trade Agreement includes Mexico and you can see what happened to the peso on election day. Right now News Sentiment is showing Bearish on USDMXN but watch out for Mr Trump and make sure you check Acuity’s Market Alerts as they have proven quite useful lately on Loonie and Peso.

To close off, let’s take a look at the indices. News Sentiment on pretty much everything is very Bearish as markets today have lost a bit of ground. We will keep an eye on these throughout the week.

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