Posted on: 25 November 2015, by: Pepperstone Support, category: Market Review
Strange price action abounds in what normally is a risk off geopolitical backdrop (see Russia/Turkey plane shoot down). US data comes in as expected, with GDP printing 2.1%. Philly Fed beats by a large margin, 26.3 vs 17.5 while Case Shiller beats at 0.6% vs. 0.3%. In spite of the these points, the USD was roughly lower against most currencies, in particular the commodity bloc.
Aussie caught a good bid early on, erasing the break below .7200 and rallying after the Stevens comments failed to give any hints on future RBA policy. Iron ore selling was ignored and market participants chose to focus on the sharp rally in copper to hitch their wagon to. This is the highest level in Aussie in November in what has been the most quiet range of trade since August of last year. Kiwi followed suit and CAD followed WTI ( 2.1% today) higher, with USDCAD taking out stops in the 1.33 area before stalling into 1.3280 support.
The bleeding in cable continues with Carney and Haldane delivering the axe to pound bulls. Talk of further policy options, up to and including negative rates, has the pound in a tailspin. 1.5050 provides initial support but bids in the 1.50 area will look to stem the bleeding. Notable offered are GBPAUD and EURGBP, the former of which has traded from 2.12 down to 2.0730 in a matter of days.
We have a decent amount of US data tomorrow due to the Thanksgiving holiday with durable goods, income/spending, and unemployment claims due. Flash PMI, new home sales, and U of Mich will be released as well which should give us some decent USD guidance going into the last week of November and into the all-important December rate hike window.