Author: Greg Michalowski

Forex news for US trading on Feb 12, 2016:

Today was a "turn-around Friday".  Stocks markets recovered. Oil prices increased by greater than 10%. Gold corrected $8 lower after it's break higher this week. 10-year note yields moved higher by 9 basis points,  and in the forex market there were some reversals for some of the currency pairs  (USDJPY for one). 

The catalyst today was better US retail sales for January which showed the consumer was still strong.  The control group which contributes to GDP was up 0.6%. That led to trader thoughts that perhaps "things are not all that bad" after all.  The Atlanta Fed GDP estimate for the 1Q was raised to 2.7% from 2.5% (done on Feb 9th), with the consumer leading the way (consumer purchases est 3.2% vs. 3.0% from the last report).  

Later Michigan consumer sentiment fell more than expected. One cannot be surprised by that given the stock markets performance since the beginning of the year.  Nevertheless, Michigan's Curtin came out and said that consumers remain upbeat about the economy long term.  OK..I will take your word for it.  Fed's Dudley was also supportive of the economy saying that "key sectors of the US economy seem to be in good shape", but he did say that Fed policy is still "appropriately" still accomodative.  Is he saying policy is "appropriate" - as in no March change?  All helped toward a "turn around Friday".

In the currencies, the JPY was a currency which was a big mover higher in trading this week. Today, the JPY was weaker, however as the "flight into the relative safety of the JPY" idea started to ease with higher stocks and better data. The USDJPY increased by 0.76% from the close yesterday.  Given the 1051 pip trading range over the first nine days of the month (8 of those days lower, with the only up day being a 5 pip gain), it was time for a rebound "just because".  It will be curious to see if the pair finds additional support for a correction at the start of the new trading week.  Remember 115.55-116.00 above though. That was the breaking point to the downside this week. It should be resistance if there is a rebound early next week.

The EURUSD racheted down in trading today although there was a recovery after failing on a break of an upward sloping trend line.  In trading this week, the price moved below the 100 hour MA on Wednesday but quickly rebounded within an hour.  Today the price fell below the 100 hour MA (at 1.12708 currently). That moving average will be a key barometer for bullish/bearish in the new trading week.  

The GBPUSD traded more like a Friday vs. a turn around Friday. That is, it raced higher into the early European session only to race back down and complete the up and down lap.  For the week, the GBPUSD wandered higher and then wandered lower. In fact, going back to this time, the Friday close was at 1.4497. The close is at 1.4500.  Closing at the same level as last week is apropo given the price action this week.

The USDCAD has been a strange bird of late (perhaps why they call it the loonie).  While oil prices have been pushing 12 year low levels, the USDCAD is well of the highs. So there is something wrong with the oil vs. CAD relationship.  Instead of falling, would a rally in oil, get the pair back together? That is, if oil corrected higher would USDCAD fall (CAD get stronger)?  For the 1st part of the day, that was not happening. The USDCAD traders seemed intent on leaning against the 200 hour MA for support. Then the level (at 1.3888) was finally broken (oil prices did go up 10% today) and the pair tumbled to the Wednesday lows at 1.3819 (the low extended to 1.3812 before recovering).  Although oil prices are up, it is up on talk of a production cut.  Is it hot air to get the price up to sell, or does it have substance?  That is what makes trading oil and perhaps the USDCAD so difficult.  Maybe that is why the pair wants a divorce.  It is just too damn hard.  

Monday is a holiday in the US and in many parts of England the kiddies are on break, so activity may be light on Monday. Having said that, Sunday/Monday does welcome back China after their week off and their Trade figures along with stock market opening, will be eyed closely on Sunday.  Other key events next week include German Zew on Tuesday at 5 AM ET/1000 GMT, UK employment on Wednesday at 4:30 AM ET/0930 GMT.  The FOMC meeting minutes on Wednesday at 2 PM ET/1900 GMT, Australia employment on Wednesday, and US CPI on Friday.  Oh.....then there is oil and stocks....but you knew that already.

Hava a great weekend.  



View More

View Full Article with Comments 1

Author: Greg Michalowski
3

US stocks end the week on a bullish note

S&P up 1.95% on the day.  The week results are still negative. The US major stock indices are ending the day with solid gains.  For the week, however, the results were less than stellar, with Nikkei plunging -12.28% for the week.   The Spanish Ibex was down -6.81%. The France Cac was down -4.89% and the German Dax was down -3.43%. The US fared reasonably well with the S&P only down -0.82% and the Nasdaq down -0.59%. The Dow fell by -1.43%

View More

Author: Greg Michalowski
2

CFTC commitment of traders report: EUR shorts slashed 24K in the current week

Forex futures market speculator positions from the CFTC commitment of traders report as of the close on February 9, 2016 EUR shorts were slashed 24K. Other big changes were in the AUD where the short was cut by 20K to near flat.  GBP shorts were cut by 9K.  JPY longs increased by 6K.

View More

Author: Greg Michalowski

S&P index trades at new day highs

Up 1.65% at 1859.29 The S&P index is up 1.65% and trades at new day highs. Yesterday, the index fell below the Jan 20 low of 1812.29 to a new year low at 1810.10. That break failed and the price has continued the move higher today.  The 182.47-1863.67 levels are the next key upside targets (see chart below). 

View More

Author: Greg Michalowski
3

Q&A from BOJ's Nakaso

Speaking in NY The USDJPY - meanwhile - continues to slowly  move higher as does the EURJPY.  

View More

Author: Greg Michalowski
1

Growth forecasts pick up.  Atlanta Fed 1Q GDP pegged at 2.7% now

Leads the forecasters.... Ryan may not like forex price forecasts, but how about GDP growth forecasts (READ his excellent post HERE).   If ok with them, the Atlanta Fed raised their estimate for 1st quarter GDP growth to 2.7% from 2.5% (forecast on Feb 9).  The rise comes on the heels of a better-than-expected retail sales report today, which saw the control group rise by 0.6%. As a result, they forecasts that 1st quarter real consumption growth will increase from 3% to 3.2%.

View More

Author: Adam Button
3

The yen was easily the top performer this week

Best week for the yen in a long time The yen gained 3.54% since last Friday and crushed the rest of the field. Aside from yen and CHF strength, what stands out is how small the changes in the rest of the currency field.

View More

Author: Greg Michalowski

Crude oil rebounds.  Key tech level eyed

50% of the last leg lower Crude oil is higher today and in the process has increased some of bearish technicals in the short term at least.  Looking at the hourly chart below, the price has moved above channel trendline resistance in trading today. It also extended above the 100 hour moving average(blue line in the chart below) at $28.275.  

View More

Author: Ryan Littlestone
3

Why is the world infatuated by forecasts?

Forecasts forecasts everywhere but not a help they are Banks love forecasts, we love forecasts (if only to pick them apart), central banks love forecasts, governments love forecasts.

View More

Author: Adam Button
8

Oil strength finally weighs on USD/CAD as support breaks

Crude up 12% The moves in the oil market are ruthless this week. USD/CAD hasn't had the tightest correlation with crude and that's puzzled traders this week. One of the reasons was has been heavy orders in the market. It's clear that a massive bid was sitting in the 1.3900/1.3880 range today. It finally broke and virtually gapped down to 1.3850 and has continued down to 1.3830.

View More

Author: Ryan Littlestone
10

EURUSD takes a little trip to 1.1214

Some late action at the European close I've got a little gap showing on my chart, anyone else? EURUSD 15m chart Might just be me but I've got the same on cable. Bloomberg shows 1.1214 as the low

View More

Author: Greg Michalowski

EURUSD testing lows as European/London traders get ready to exit

Trend line being pushed as well Well... we just printed new session lows at 1.1220.  ON the hourly chart, the price is also creeping further below the trend line.   The move is helped by end of week flows and stocks are doing better. The Dax is up about 2.18% as is the Euro stoxx index. In the US the S&P is trading at the highs for the day +1.53%.  

View More

Author: Adam Button
2

Dudley: Recent events will factor into March FOMC decision

Dudley in the Q&A after his speech - Fed is data dependent in terms of policy - Markets recently reflecting developments abroad - If financial conditions tighten we take it into account I don't understand why the Fed is so sure that developments abroad are the driver, rather than the blowout in commodities and junk bonds.

View More

Author: Greg Michalowski
3

It looks like a Friday. It smells like a Friday. It is Friday.

Holiday on Monday We are a nearly 3 hours into the NA trading session and we are getting those Friday vibes.   The EURUSD fell on the stronger retail sales but held support near the trend line support at 1.1229.. There was another push that took out the lows on headlines of an ECB cut and that was quickly reversed.  Michigan consumer sentiment came out weaker but the 100 bar MA held resistance on the 3rd consecutive test.  The price is now rotated back to the low 1.1240s

View More

Author: Adam Button
19

Risk trades slowly march higher alongside oil

S&P 500 up 19 points to 1848 An important caveat headed into the weekend is that the US is on holiday Monday (all markets closed) and China returns after a week of holidays.

View More

Author: Adam Button
3

Fed's Dudley says key sectors of US economy 'seem to be in good shape'

Comments from NY Fed President Dudley: - Main danger to current expansion is big shocks - Households better able to absorb shocks than in 2008 - US household debt services ratios have declined He's upbeat but the comment about rates being appropriate suggests he isn't supportive of any hikes.

View More

;