Session Wraps - Major Forex Headlines wrapped up by trading session

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Forex news for North American trading on October 23, 2020:

Markets:

  • Gold down $2 to $1902
  • US 10-year yields down 2 bps to 0.836%
  • S&P 500 up 12 points to 3465 (down 0.5% on the week)
  • WTI crude oil down 88-cents to $39.76
  • EUR leads, GBP lags
We may have settled into a pre-election lull as it was a day of ebb and flows but not much conviction.

Sterling continues to be the mover as it gave back another big chunk of Wednesday's rally in a fall as low as 1.3020 before bids ahead of the figure gave it a little lift late. The news that negotiations were back on led to the big lift but no one wants to ride the rollercoaster for the next three weeks. There was a big pop on a report that France was telling fishermen to quotas next year will be lower but it was quickly sold.

The euro showed some impressive resilience to more worrisome COVID numbers throughout the continent. It ended up having a nice week, which is either a sign of resilience or a sign of investors getting out of US-assets on election fears.

The loonie was soggy as oil slumped on news that Libya planned to double oil production to 1mbpd in four weeks.

The Australian dollar fared a bit better as it tracked the ebb and flows of broader sentiment. US stocks wobbled mid-day but found a footing late and AUD/USD finished the day 20 pips higher.

Have a great weekend.

Forex news for North American trading on October 23, 2020:

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Author: Justin Low

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Forex news from the European trading session - 23 October 2020

Headlines:

Markets:

  • AUD leads, GBP lags on the day
  • European equities higher; E-minis up 0.2%
  • US 10-year yields up 0.5 bps to 0.861%
  • Gold up 0.4% to $1,911.27
  • WTI up 0.3% to $40.78
  • Bitcoin down 0.9% to $13,000

EOD 23-10
The dollar was holding steadier to start the session but the market mood turned around after German manufacturing PMI for October beat expectations, highlighting some resilience seen in the economy despite the worsening virus situation.

Although there will still be questions surrounding Q4 economic conditions, the market is seeing a reprieve for now that at least things aren't turning dire just yet.

That led to a turn in sentiment, which saw the dollar being squeezed across the board. Meanwhile, European equities surged ahead with gains and US futures also turned around a softer start to keep slightly higher now ahead of North American trading.

EUR/USD broke above its 100-hour moving average @ 1.1814 as buyers seized near-term control in a push from 1.1804 to 1.1820 initially before extending to 1.1854.

USD/JPY also eased from 104.75 to 104.55 but have reversed the move in the past hour. Elsewhere, AUD/USD pushed to a fresh one-week high from 0.7115 to 0.7158 but is running into some resistance from its 38.2 retracement level @ 0.7158.

GBP/USD also gained from 1.3080 to 1.3113 but gains fizzled as the pound is finding it tough to rally further after the strong push on Wednesday.

As we look towards the weekend, US stimulus talks and election focus will dominate the proceedings once again. That could either help to carry the current mood or detract from it, so be wary of the headline risks that may follow.

Also, keep an eye on 10-year Treasuries as it approaches the 200-day moving average:

USGG10YR

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Forex news for Asian trading on October 23, 2020

Fundamentally today, New Zealand CPI came in weaker than expectations. That helped to put a lid on the NZDUSD although with a 22 pip trading range, I can't honestly say it was a route to the downside.  Nevertheless the pair is trading lower by about 13 pips.

In Australia, the PMI data for manufacturing services and composites generally came in better-than-expected and certainly well above the 50 level defining contraction and expansion for each of the measures (manufacturing came in at 54.2, services came in at 53.8, composite came in at 53.6). The AUDUSD moved higher but lost upside momentum and came back down toward support defined by the 200 hour moving average at 0.71086. The 100 day moving average is at 0.7105. The price is trading at 0.7111.

In other data, Japan CPI data continue to show stagnant inflation with the core measure at -0.3% year on year. That story remains the.

The big event for the new trading day happened in the US where Pres. Trump and former VP Biden had their 2nd presidential debate. 

On the back of the 1st debate - which many considered the equivalent of a dumpster fire (and that is putting it in a good light) - the candidates debated without all the interruptions and childlike misbehaving (mostly from Pres. Trump).  Of course, the debate today muted the microphone when each candidate was making their initial remarks. A another difference was that the moderator did a good/great job of controlling the flow. Honestly, although there is always the attraction of a train crash in a weird way, not having one today was somewhat of a relief.

As a result, pessimism before the debate had the S&P futures modestly lower, stalled the prices turned back into the black (modestly).   

With the move higher in stocks, the USD - which was higher ahead of the debate on flight to safety flows, saw some modest weakening off its highs.  

Having said that, the greenback is still ending the first 1/3 of the new trading day higher. That may be as a result of the OTHER story in the US - namely the coronavirus stimulus deal which seems to still have doubters on the GOP and Dem sides.  That story will play out with more details during the New York session later today. However, for a moment, the focus was diverted from that problem, and focused on the the debate.  

Forex news for Asian trading on October 23, 2020

With debates now over, the focus over the next 11 days will be on a miracle deal and then the election which is not just 11 days away. 

Wishing everyone a safe and happy weekend.  


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Forex news for North American trade on October 22, 2020:

Markets:

  • US 10-year yields up 4 bps to 0.864%
  • Gold down $19 to $1904
  • WTI crude oil up 65-cents to $40.68
  • S&P 500 up 18 points to 3453
  • NZD leads, GBP lags
Coming out of yesterday and with the political intrigue building, I thought we could see some big moves today but it was a restrained session. The theme was a reversal of some of the moves a day earlier as the US dollar rebounded and gold slumped.

One trend that's continuing is the break higher in Treasury yields. US 10s definitively broke the September high in a rise to 0.84% and that may have added to the USD/JPY bill.

The stimulus dance continues but there are so many signs that time has run out. Still, an upbeat headline from Pelosi sparked some buying in equities and that eventually spread to commodity currencies.

The Brexit newsflow was much quieter and that led to some profit-taking in always-weary GBP trade. Daily negotiations are about to begin, so it won't be quiet for long.

Forex news for North American trade on October 22, 2020:

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