Session Wraps - Major Forex Headlines wrapped up by trading session

Forex news for North American trading on June 16, 2021:

Markets:
  • Gold down $28 to $1829
  • US 10-year yields up 11 bps to 1.57%
  • WTI crude down 24-cents to $71.88
  • S&P 500 down 23 points to 4223
  • USD leads, CHF lags
We had at least three days of waiting and minimal trade ahead of the Fed but all the build-up was worth it as the Fed delivered a big surprise. The anticipation ahead of the meeting was that they might move the dots to show one 2023 hike. Instead it was two hikes and 7 of 18 are now forecasting a 2021 hike.

The market reaction spoke in a big way after the decision with the dollar soaring and continuing to rise when Powell offered little push back. USD/JPY moved to 110.30 from 109.90 in a flash but then added another 30 pips from there.

With trading winding down, it looks like the US dollar will finish at the highs of the day.

Cable fell victim to the dollar rally as it dropped to 1.3995 from 1.4100, which is the first time below the figure since May 9.

The euro will be one to watch in the days ahead as it tests 1.20 once again. So far it's held the line so far after a fall from 1.2125. If that breaks, the May low of 1.1986 is in play.

More broadly, there are some interesting patterns shaping up on the dollar charts. We'll have more on those in the hours ahead.
Forex news for North American trading on June 16, 2021:

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Author: Justin Low

Forex news from the European trading session - 16 June 2021

Headlines:

Markets:

  • NZD leads, CHF lags on the day
  • European equities mixed; S&P 500 futures -0.1%
  • US 10-year yields down 0.7 bps to 1.485%
  • Gold down 0.2% to $1,854.63
  • WTI up 0.2% to $72.27
  • Bitcoin down 2.2% to $39,068

The market continues to keep more sideways in general, with the dollar holding steady and little poise in equities and bonds as all eyes are on the Fed today.

The pound got a slight lift after hotter UK CPI data but it isn't really amounting to much with cable testing near-term levels and sticking around there for now, moving up from 1.4090 to 1.4120 during the session.

EUR/USD remains lackluster, trapped in a 24 pips range between 1.2114 and 1.2135.

The aussie and kiwi are holding a slight advance but once again it isn't anything that really stands out in the context of the past few weeks.

Elsewhere, the ECB continues to reiterate that it isn't the time to discuss ending PEPP while China took further action to try and rein in surging commodity prices.

The countdown to the FOMC meeting continues.

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Forex news for Asia trading on Wednesday 16 June 2021

There were some minor moves across major forex rates during the Asian session here today with some position-squaring (and opening!) continuing heading into Wednesday US Federal Reserve Federal Open Market Committee decision (1800GMT) and Chair Powell's press conference following (1830 GMT).

EUR/USD has ticked a few points lower, and the USD also traded a little higher against the yen and CHF. Cable is barely changed, as is USD/CAD. Both the Australian and New Zealand dollars added a few points against the US dollar. Please note ranges for all were very small indeed, if you are inclined to dismiss the moves I have described as irrelevant it would be difficult to argue with you.

There was no fresh news of impact, data releases were from NZ, Australia and Japan (see bullets above). There is still data to come from China today, due at 0700 GMT.

Oil continued to tick higher, helped along somewhat by a large (largest in 5 months) headline draw (but do note the 'product' builds - see bullets above).

Gold dribbled a little lower, towards its US afternoon lows but not quite getting there. BTC/USD straddled $40K.

gold chart 16 June 2021 fomc

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Forex news for North American trading on June 15, 2021

T minus 22 hours until the FOMC decision at 2 PM ET.  

The Fed is expected to keep rates on hold, but could look to start telegraph taper ideas.  The data today saw retail sales give back some of the gains seen over the last 2-months.  PPI continues to show pipeline cost pressures  (up 6.6% YoY) .  Industrial production and capacity utilization came in better than expectations, but the prior month was revised lower. US business inventories showed a decline and combined with sales, the inventory-to-sales ratio is near low levels which could be more inflationary down the road. The NAHB housing market index dipped from last month and was lower than expectations but still remains elevated.

In the commodities markets, the price of lumber - which skyrocketed this year until May 10 when it peaked at $1738 -  continued its run to the downside since peaking, and moved to the lowest level since April (low reached $943 today). That move is down 41% from the high.  That is certainly good news for the inflation trends for the Fed.  

We will see what happens tomorrow, but what we know is the Fed has one eye on inflation, and another eye on the 7.5M of workers still out of work.  Moreover, they are anticipating the reopening bottle necks will dissipate  as time goes by.

Looking at the forex market today, the CHF is the strongest and the CAD is the weakest. The CAD weakness is despite a run up in the price of crude oil which took the price above the $72 level for the first time since October 2018.  Crude oil futures in after hours trading is moving even higher after a larger than expected drawdown of inventories from the private oil inventory data (-8.54M barrels vs estimate of -3.5M).  The price of crude is trading at $72.43. That is up $1.54 or 2.19% and just off the high at $72.48. 

The USD today did start the day off as the strongest of the majors, but lost ground to the CHF, EUR and JPY. It is closing mostly higher with gains versus the commodity currencies and the GBP, and modest declines versus the CHF, EUR and JPY (the USDJPY barely moved today with only a 18 pip range).  

Point million hundred million we need 1.3 million theForex news for North American trading on June 15, 2021

In the US debt market today, yields are ending mixed with the two year up modestly, the 30 year up modestly and in between the five and 10 year yields down modestly. The treasury auction of $24 billion of 20 year bonds was met with very strong demand. If there is concern about inflation, the auction and yield dip seen of late, is not showing investors are all that worried.  

US yields In the US and European equity markets, the major US indices all fell. In Europe, Spain and Italy ended in the red but Germany, UK, France all closed higher. The US decline was led by the NASDAQ index X which felt -0.71% one day after closing at an all-time record high (not much momentum on that break)

US stocks in European stocks

In other markets:

  • Spot gold is trading down $7.37 or -0.39% at $1858.81.
  • Spot silver is down $0.19 or -0.69% at $27.66
  • The price of bitcoin traded above and below the $40,000 level it currently trades up about $112 at $39,965
Some technical levels to eye in the new trading day:
  • EURUSD: EURUSD stalled its fall near the 1.21000 level today. There is a swing area at 1.2099 to 1.2106. The current price is up at 1.2125.  The up-and-down price action today as helped to push the 100 hour moving average lower. It currently is right at the 38.2% retracement of the most recent range from the June 9 high. That level comes in at 1.21398. Stay below that moving average and the sellers and buyers  will continue to battle out between the 1.2000-1.2106 level below and the 100 hour MA/38.2% retracement above at 1.21398. 
  • GBPUSD: The GBPUSD broke below the most recent swing lows between 1.4085 from June 3, and Monday's low at 1.40692. The break triggered stops and push the price down to 1.40335, the lowest level since May 13 at the NY open. However, the price quickly started to rebound and moved back above those levels. The current price is trading at 1.4080.  Although the price is still near the lowest levels since mid-May, it will take a move back below 1.40692 (low from yesterday) to give the sellers more control and confidence that the run lower today, wasn't just an aberration.  On the topside, the 100 hour moving average currently comes in at 1.4116. The high price for today did stall right at that moving average level (it was higher at the time).  Ultimately it would take a move above the 100 hour moving average to give buyers even more control. 
  • USDJPY: The one thing you can say about the USDJPY is the 18 pip trading range today will likely be more tomorrow. The current price is at 110.05.  There is a swing area between 109.84 and 109.952. Get below that area and some of the bullish bias seen since last Friday starts to come out of the market.
  • USDCAD: The USDCAD moved up to test the May 13 swing high price at 1.22027 (the high reached 1.2203) but could not sustain any momentum above the level. Teh price has moved back down toward the high price from last week near 1.2178. That level is also the 50% midpoint of the range since the May 4 high.  Get below that level and there could be more downside probing as traders tilt more to the downside after testing the May 13 swing high.

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