Today’s Trading Plan 06.20.17 – USDCHF and EURGBP

*Good morning/afternoon everyone!*

The big story this morning is the drop in the British pound courtesy of Bank of England Governor Mark Carney. The BoE head expressed concerns about Brexit and wage growth, repeating the worries he shared at the release of the Quarterly Inflation Report. Unlike some of his peers he believed it would take a few months before a recovery in wage growth supports spending, making it clear that he does not support an immediate hike.

With no comments on monetary policy from Vice Chair Fischer, the U.S. dollar is struggling to extend its gains. Rosengren and Kaplan speak again today and we already know that Kaplan feels the Fed should be cautious about raising rates. Evans who spoke last night said it remains to be seen if there’ll be 2 or 3 rate hikes in 2017. Although Dudley and Yellen have been pounding the table about the strength of the economy, it is clear that other FOMC members are less enthusiastic. Rosengren’s comments will be interesting but he is NOT a voting member of the FOMC this year. If USD/JPY breaks below 111.40, we could see a steeper slide down to 111.00.

EUR, AUD and NZD are relatively quiet this morning whereas the Canadian dollar is finally responding to the drop in oil prices. Crude is down another 1.8% this morning after falling nearly 2% yesterday. New Zealand has a dairy auction this morning.

*The MAIN THEMES I see today are*

+USD
-EUR
-GBP
-CAD

*Trading Biases*
These will change after US data

+USD
-EUR, -GBP, -CAD, -CHF
mildly -AUD and -NZD
neutral JPY

*Today’s Potential Ideas*

Look to Buy USDCHF at 0.9711, Stop at 0.9661, Target 0.9741
Look to Buy EURGBP at 0.8785, Stop at 0.8735, Target 0.8815

Swing

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