Session Wraps - Major Forex Headlines wrapped up by trading session

Forex news for New York trade on January 17, 2020:

Markets:
  • Gold up $4 to $1557
  • WTI crude up 22-cents to $58.74
  • S&P 500 up 13 points to record 3329
  • US 10-year yields up 1.5 bps to 1.82%
  • USD & JPY lead, GBP lags
The big surprise of the day was the 16% jump in US housing starts in the third month in a row of good gains. Some pointed to unusually warm weather but lower mortgage rates are undoubtedly part of the equation and the data gave another reason for USD bulls to cheer.

The impact was broad based but not in the yen, which was curious because the risk trade continue to improve. Both the AUD and NZD ended at the lowest levels of the day with CAD not far off.

The laggard was the pound after a dismal retail sales report pushed the odds of a BOE hike this month up to 73%. The pound finished down 64 pips and more than 110 pips off the high, which came moments before the data.

Have a great weekend!

Forex news for New York trade on January 17, 2020:

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Author: Justin Low

Forex news from the European morning session - 17 January 2020

UK retail sales has not posted a positive monthly reading since July 2019

Headlines:

Markets:

  • JPY leads, GBP lags on the day
  • European equities higher; E-minis up 0.25%
  • US 10-year yields up 0.9 bps to 1.816%
  • Gold up 0.3% to $1,557.18
  • WTI up 0.4% to $58.74
  • Bitcoin up 1.6% to $8,819

UK retail sales
The pound was the main mover on the session as the BOE rate cut fever continues to build amid a slump in UK December retail sales activity - despite Black Friday sales.

The monthly drop continued a streak of zero growth in UK retail sales over the last five months and that represents the worst run since ONS records began in 1996.

Cable initially rose to a high of 1.3118 in the run up to the data but was met with a harsh reality check as price tumbled to 1.3050 in the aftermath before chasing a low of 1.3027.

This came as BOE rate cut odds for January rose to ~73% from ~60% prior to the data.

Meanwhile, the dollar is keeping a little more firm as the euro also eased a little from 1.1130 to 1.1110. Large expiries mired between 1.1100 to 1.1150 is likely to keep price action limited before they roll off later in North American trading.

USD/JPY is little changed around 110.15-25 as stocks kept more steady in general while European equities are running higher, trying to chase overnight gains in Wall St.

The rest of the major currencies bloc isn't doing much as traders continue to search for a key theme to latch on to after the US-China trade deal signing this week.

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Forex news for Asia trading Friday 17 January 2020 

China's Q4 and full 2019 year GDP was published today (see bullets above, but in brief):

  • Q4 y/y hit in line with the median estimate and was the same as in Q3
  • 2019 as a whole came in at a slight miss

FX response was little more than a minor wobble. Across the major currency board there is little net change to report. Ranges have been subdued and most are tracking near their mid-point as I post. USD/CAD is on its session high but the range has been only circa 10 points. Try not to sneeze and it shouldn't move.

News flow was light. About the only item of note was the US military did admit there were military personnel injured in the Iranian missile attacks on January 8. You'll recall at the time officials denied any casualties, but today's news confirmed there were, some reported as traumatic brain injuries. For markets there may be implications to come from this news, perhaps along the lines of tweets from the US President, perhaps something more substantial. Keep on the watch. 

Forex news for Asia trading Friday 17 January 2020 e

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Forex news for near trading on January 16, 2020

In other markets as the day comes toward the close:

  • Spot gold is trading down $2.72 or -0.72% at $1553.64
  • WTI crude oil futures are trading up $0.66 was 1.14% at $58.47
The major indices closed at record levels and near the highs for the day as well:
  • S&P index
  • NASDAQ index
  • Dow industrial average
In the US debt market yields were up marginally higher with the 2 year up 1 basis point and the 10 year up to basis points. Below are the ranges and changes for the yield curve.

Forex news for near trading on January 16, 2020 In the forex market in the New York session the dollar recovered earlier declines.  At the start of the NY session, the greenback was down versus all the major currency pairs lead by a -0.51% fall vs the NZD, a -0.33% fall vs the AUD and a -0.24% fall vs the GBP. It was only higher vs the JPY at +0.07%.  

At the end of the day, the dollar was still lower vs the NZD but only by -0.33% on the day an was lower by -0.28% vs the GBP, but had turned positive or near unchanged vs the other currencies (see the % changes of the USD vs the major currencies in the chart below.

Although the NZD and the JPY remained the strongest and the weakest on the day, the dollar recovered nicely.  

The ranges and changes of the major currency pairs
Helping the recovery was some decent data. The retail sales data was ok. The headline numbers were a touch higher than expectations but revisions to the Control group and the ex auto and gas breakdowns, took some of the good away.  So overall it was as expected.  

What was beneficial to the dollar today was the Philadelphia Fed business outlook index which came in at 17.0 versus 3.8 estimate and 2.4 last month. That rise took the index to near the high going back to the 4Q of 2018.  

Jobless claims were also better-than-expected at 204K vs 218K estimate and 214K last week. Admittedly, seasonals can have a positive or negative impact to the data around the new year, but on the surface it was a solid number.  

The NAHB housing market index was a touch higher at 75 versus 74 estimate.  

Technically,
  • The USDJPY remains above its trailing 100 hour moving average at 109.906 (currently). and looking to test the high price from Tuesday at 110.204. A move above would open up space for further upside potential.  It will take a move below the rising 100 hour moving average to give sellers a victory.  There is additional support at 109.675-723 area. That area was the ceiling in the month of December and into January.  
  • The EURUSD moved higher in the London morning session but stalled against a topside trend line on the hourly chart at 1.1172. The inability to extend above that trend line give sellers the go ahead to push back to the downside. The positive tone for the US dollar push the price below the 200 hour MA, the 200 day MA and the 100 hour moving average. All of them are at 1.1136 going into the new trading day.  KEY level.  That is where the current price is trading.  So the market will have a decision to make in the new trading day - go back higher and away from the cluster of MAs, or go lower and away from the same cluster of MAs.  Go with the flow and momentum.
  • While the EURUSD was going lower, the GBPUSD was moving higher.  There is more chatter about the BOE cutting rates and there was some weakness in the GBPUSD that took the price toward the 100 hour MA below at 1.30208. However, the price snapped back higher and above the 100 bar MA and 200 hour MA currently at 1.3065 area.  The price is above each of those MAs at 1.30742 giving the pair a "little more bull" into the new day. 
  • The NZDUSD closed higher (and the currency was the strongest) but it also fell from the intraday high at 0.66646. The fall from the high, however, did find support buyers against its 100 hour moving average at 0.66256 in the NY afternoon session. The pair is trading at 0.66401 near the close.   In the new day, stay above the 100 hour moving average at 0.66256, and the buyers are in control.  Move below and the bullish bets are off. 
Wishing our friends in the Asian Pacific session a happy weekend.   Good fortune with your trading

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