Session Wraps - Major Forex Headlines wrapped up by trading session

3

Forex news for North American trade on September 20, 2019:

Markets:

  • Gold up $17 to $1516
  • WTI crude flat at $58.09
  • US 10-year yields down 6.6 bps to 1.72%
  • S&P 500 down 15 points to 2992
  • JPY leads, NZD lags
The session turned on vague headlines about Chinese officials canceling a hastily-planned trip to visit Montana and Nebraska. The report said Chinese negotiators would be headed home instead.

The market was left to figure out whether this was the start of talks falling apart or some kind of scheduling conflict. Trump was also tepid at a press conference, saying that he didn't want an interim deal and was willing to wait until after the election.

Risk trades fell on the headlines and continued to slowly slump into the close. Yen crosses were hit harders with USD/JPY falling 40 pips to 107.55. NZD/JPY was under pressure all day but fell further to hit 67.31 and is now within striking distance of the lows of the month.

It was also the third day of declines for AUD/USD as it erases the early-September bounce and creeps close to the Sept/Oct triple bottom. The pair was higher early in the day but closed down 28 pips to finish on the lows on fear of a weekend trade blowup.

EUR/USD weakened from the start of European trade until the London close. Selling into the end of the day led to a small break of 1.1000 but it climbed back above afterwards.

Cable gave back Thursday's gain as the market had a second look at Juncker's comments and decided there was nothing new. Johnson's Irish border plans also began to leak and the outlook isn't promising.

Gold jumped on the trade headlines to finish at the highs of the week at $1515 in a quick $14 rally late.

One asset class that bounced off the lows was stocks as a deep loss was trimmed. I suspect that was partly due to the Powell put and partly due to quadruple witching. There was some last-second selling into the close but expect a gap to start the week when we get word -- one way or the other -- on China-US talks.

Forex ticker for news wrap Sept 20, 2019

View More

Author: Justin Low

7

Forex news from the European morning session - 20 September 2019

Headlines:

Markets:

  • CHF leads, NZD lags on the day
  • European equities higher; E-minis up 0.2%
  • US 10-year yields up 0.4 bps to 1.788%
  • Gold up 0.2% to $1,501.50
  • WTI up 1.0% to $58.72
  • Bitcoin down 1.1% to $10,150

EOD 20-09
It's been a choppy session for the most part as the dollar struggled initially amid weaker bond yields and equities before things flipped around towards the tail-end of the session.

That said, the pound was the notable mover as it picked up early bids - building up from where it left off overnight - as cable surged to a high of 1.2582 before consolidating around 1.2550-60 as European officials pushed back against Brexit optimism from yesterday.

Soon enough, the pound slipped and cable dropped as the dollar also firmed in a quick move towards 1.2500 where it is barely staying afloat currently.

The dollar's turnaround also came amid a pick up in yields but overall risk sentiment is rather modest and isn't telling of any significant risk-on/risk-off shifts.

EUR/USD fell off highs around 1.1068 to near session lows now around 1.1030 levels while AUD/USD eased from 0.6800 to 0.6780-90.

The yen and franc continued to hold steady for the most part with USD/JPY hugging 107.80-90 levels while USD/CHF stayed around 0.9900-20 for the most part.

Overall, markets still look choppy amid some indecisiveness after the FOMC meeting on Wednesday and traders are still largely looking for fresh sentiment/direction to guide them as we head towards the weekend.

In other news, I'll be taking a leave of absence over the next ~2.5 weeks so I want to wish everyone good luck with their trading in the mean time and hopefully I won't miss much during the interim, heh. ;)

View More

Forex news for Asia trading Friday 20 September 2019

A couple of items to note during Asia today. Firstly, the Bank of Japan cuts its purchases of JGBs across the 3 maturities it was buying today, in effect sending a message that it wants a steeper curve and its tools remain useful. Yen is little changed for the day, USD/JPY has dipped from highs just above 108.05 to under 107.95 as I update. CPI data from Japan showed results a little under the previous month's readings.

In Australia we saw more banks moving their RBA rate cut forecasts to October (the Reserve Bank of Australia meeting is October 1) from November, and other revisions moving calls sooner (see bullets above). AUD/USD fell to lows under 0.6780 during morning trade but has come back a little towards 0.6795. NZD/USD fell on the session also and is barely off its lows around 0.6290 as I update.

The People's Bank of China left onshore yuan basically unchanged (2 tics change) at the mid-rate setting. The monthly setting of the loan prime rate that followed soon after saw a 5bp reduction for one year loans and unchanged for 5 years. The LPR, we are told, is a market-based rate representative of actual rates charged by banks, as opposed to the policy rate MLF, which has not been cut despite many expectations it will be. 

There were reports of USD demand seeping into swaps markets and thus supporting the USD. While some currencies fell against the dollar early as I post EUR, CHF, GBP are all better bid against it. AUD has recovered somewhat. Yen is tiny up also. CAD and NZD are laggards. Gold has had an upmove for the session. 

EUR up on the session:

Forex news for Asia trading Friday 20 September 2019

View More

1

Forex news for NY trading on September 19, 2019

A snapshot of other markets near the close of the day are showing:

  • Spot gol, up $4.68 or 0.31% at $1498.65. The New York session saw the price of trade above and below the $1500 level. The high for the day reached $1504.60. The low for the day extended to $1488.90
  • The October WTI crude oil contract is trading up $0.51 or 0.8% at $58.62. That is up from the settlement price which was down near unchanged on the day. The low for the day reached $58.01. The high extended to $59.54
The GBP is ending the day as the second strongest currency of the majors (the first was the CHF).  That was not the case at the start of the New York trading day.
  
Forex news for NY trading on September 19, 2019.

In fact the pound was down vs the most of the major currencies with only gains vs the AUD (+0.41%) and the NZD (+0.09%) at the start of the NY session.

However, in the early NY afternoon session, European commissioner Jean-Claude Juncker in an interview with Sky News, said that "We can have a deal on Brexit" and that he would do everything to get a deal as no-deal would have catastrophic consequences.  

Those comments helped to push the GBP sharply higher. The GBPUSD moved to a new session and two month high of 1.25594. It also sent a pair away from its 100 day moving average currently at 1.2492.  The pair moved down over the last few hours of trading. Nevertheless, the pair will be closing above is 100 day moving average for the first time since September 9.  

Whether that break holds up over time willl be up to "the market"  However, traders cannot ignore the break and close from a technical perspective.  Should the bias remain bullish, the pair targets 1.2580, a trendline at 1.2630 and the 50% retracement of the move down from the March 2019 hi. That comes in at 1.2668

Another influence came from a White House advisor who said that Pres. Trump is ready to escalate a trade war with China if no deal is imminent. That would include raising tariffs on China goods to 50% to 100%. The news weakened the US stocks. By the end of day, the major indices had eroded most of their gains from earlier in the session.

US stocks closed near session lows while European stocks closed near session highs Other fundamental news for the day included:
  • initial jobless claims remained strong at 208K versus 213K estimate. The four-week moving average remains near lower levels
  • Philly Fed business outlook index came in better than expectations but lower than the previous month. Inflation measures were higher. Employment, shipments unfilled orders inventories and average workweek also were higher in the month.   
  • US existing home sales were better-than-expected at 5.49 million annualized pace. That beat the 5.38 million estimate. It was also higher than last months 5.42 million level. Lower mortgage rates and a solid economy are breathing life into the home buying market. Yesterday building permits and housing starts were also stronger than expectations
As mentioned above, the Swiss franc is ending the session as the strongest currency. All/most of the gains occurred in the European morning session. The Swiss National Bank separates unchanged which is something new for central banks lately. After bottoming near its 100 day moving average of 0.9903. The pair corrected as high as 0.9941 in the New York session and is closing between its 100 hour moving average of 0.99285 and 200 hour moving average of 0.99203.

The USDJPY also fell on the day (JPY higher).  The Bank of Japan also Rates unchanged. The fall in the USDJPY did test it's 200 hour moving average on two separate occasions. Each dip found buyers. The 200 hour moving average and 100 day moving average currently converge at 107.89.  Although support buyers were found, they could not muster enough buying momentum to take the price back above its 100 hour moving average at 108.068.  In the new trading day, traders will be watching those two levels (108.068 on the top side and 107.89 on the bottom side) for the next bias break.  

The EURUSD opened the New York session near highs from Tuesday and Wednesday at the 1.1072 to 1.1075 area. The price momentum higher could not break above that ceiling, however, and the price fell back toward its 100 and 200 hour moving averages currently at 1.1042-44 area.  The pair is closing just below those levels at 1.1040.  In the new trading day, staying below will be more bearish, while moving above should solicit more buying.  

TGIF to our Asia-Pacific friends. Wishing you all a happy and healthy weekend.

View More

More session wraps for your convenience.

By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose