Forexlive Asian Pacific news wrap: Australian GDP misses, and the market punishes. Stocks tumble

Author: Greg Michalowski | Category: News

Forex news for Asian Pacific traders on December 6, 2017.

In other markets a snapshot of the values are showing:

  • Spot gold is up one dollar or 0.08% at $1266.93
  • WTI crude oil futures are down $.23 or -0.40% at $57.39
  • US yields are little changed. two year is trading at 1.810%, -1 basis point. 10 year is trading at 2.3438%, -0.7 basis points
  • Asian-Pacific stocks are moving sharply lower.  Japan's Nikkei 225 is lower by 455 points or -2.02%.  Shanghai composite index is down 24 points or -0.73%. Hang Seng index is down 456 points or -1.59%. Of Australia's S&P/ASX index is down 27.9 points or -0.47%
  • The safe haven bitcoin (do you think it is a safe haven?) surged above $12,000 to a high of 12,286.68. It currently trades at $12,221.82 up $444.87.
The Asia-Pacific session did not have a lot of economic data released. 
  • The ANZ job advertisements for the month of November fell by -0.1%.  The prior month showed a healthy +0.9% increase. The news did not have much of an impact on the NZD.  Later in the session, however, the NZDUSD did break to the upside, but it seemed to be more of a technical break than anything.  
  • The other piece of news was out of Australia. The Australian GDP for the 3Q came in a touch weaker than expected at +0.6% vs +0.7% estimate. The YoY was also weaker at +2.8% vs +3.0% estimate. The initial price action was to the upside (the high reached 0.7630 on my chart). Traders cited perhaps an algo gone mad for the move higher.  However, after the spike higher, the pair tumbled lower - trading down to 0.7571. That was the lowest level for the week. In the process, the pair fell below the 200 and 100 hour MA at the 0.7598 and 0.75946 levels respectively. Those level will be risk defining levels as the day progresses. Stay below and the bears remain in control. On the downside for the AUDUSD the 0.7550-56 is home to a number of swing levels on the hourly chart going back to November 22.   I would expect that area to be a tough nut to crack - at least initially - on a test.  
Other action in the sessions worth a few lines...
  • Stocks did not fair well in the Asian session, led by a fall of 2% in the Nikkei.  
  • Bitcoin surged above the $12,000 for the first time. Is bitcoin attracting safe haven flows?  It just goes higher.  
  • Fed's Evan's in a interview in the NY Times, asked "Why hurry to raise rates?"
  • Jeffrey Gundlach of Doubleline said we are in the middle innings of the tightening cycle and that we could see the 10 year up to 5%-6% in 4 years.  He might not be in a hurry but thinks rates will continue to go higher.
  • The GBPUSD tested the 200 hour MA early in the session and bounced modestly. That MA is now more important after the successful test and bounce. It comes in at 1.34059. Be aware of its importance
  •  After testing the 100 day MA yesterday in the EURUSD at 1.1796 and bouncing (closed at 1.1823). The pair moved higher to 1.1848. We trade near the midpoint of the week at 1.1839.   The trading high for the week is 1.1878. The close on Friday was 1.1890. So there is a weekend gap from the close that has not been filled (be aware if the move higher does pick up some steam).  ON the downside, move below 1.1824 (close from yesterday), and the sellers are still more in control.  
  • The USDJPY move below its 100 hour MA at 112.51 and continued through a floor at 112.358, the 100 bar MA on the 4-hour at 112.24 and the 38.2% on the hourly chart at 112.22. The 50% and the 200 bar MA on the 4-hour comes in at 111.96 and is a target for traders going into the European/London session 
  • Check out the GBPJPY analysis HERE. Barclays called it the trade of the week and some of the FXL traders liked selling it too.  The pair is down testing the lows from Friday and Monday currently and the bears are indeed winning (so far).  

Below is the snapshot of the strongest and weakest through the first 8 hours of trading today. The JPY is the strongest (flight into safety on equities falling), while the AUD is the weakest (on the weaker GDP).  

Good fortune with your trading....