Forex news for Asia trading Tuesday, November 29, 2016.
- German preliminary CPI due out in the European session
- Japan 2 year note average yield -0.156%
- What the banks are saying about US GDP
- EURUSD trades to new session lows
- Poloz: US election relieves a certain amount of uncertainty for business
- More BOC Poloz...
- Dollar remains confined in narrow ranges with the USDJPY getting most of the focus
- BOC Poloz answers questions after speech
- People's Bank of China sets yuan reference rate at 6.8889 (vs. yesterday at 6.9083)
- Forex technical analysis: GBPJPY bounces off 200 hour MA/Trend line
- Japan retail sales MoM 2.5% vs 1.1 estimate
- Japan household spending YoY for October -0.4% vs. -1.0% estimate
- Japan jobless rate for October 3.0%vs. 3.0% estimate
- S&P: Asia Pacific's economic growth appears to be steadying.
- Forex technical analysis: EURUSD closing just below the 200 hour MA
- BOC Poloz: Continued expansion of service sector is pointing the way for full recovery
A snapshot of other markets:
- Hang seng -0.8%,
- Shanghai composite index +0.52%
- Nikkei 225 -0.33%
- Spot gold $1191.43, down $2.50, -0.20%
- Crude oil futures $46.80, -$0.28 or -0.62%, Brent crude oil $47.98, -$0.26 or -0.54%
- US 10 year note yield 2.3124%, unchanged from Monday's NY close.
Apart from the USDJPY which had a 63 pip trading range, the other major currency pairs were confined to narrow trading ranges in the Asian Pacific session. As examples, the EURUSD range was 33 pips. The GBPUSD...31 pips. The AUDUSD... 39 pips. The NZDUSD... 20 pips Even the USDCAD had a narrow 36 pip trading range even though Bank of Canada's Governor Poloz gave a speech, answered questions and then had a press conference. The good news for traders coming in the European and London session, you have a clean slate for which to draw a bullish or bearish bias...perhaps. There is room to roam. So get at it and run....
Fundamentally, in the session,
- the Japan employment report came in close to expectations at 3% while the jobs-to-applicants moved to the highest level since 1991 at 1.40x.
- Household spending YoY recovered to -0.4% YoY which was better than the -1.0% estimate and higher than the -2.1% YoY from the prior month.
- Retail sales rose by a greater than expected 2.5% vs 1.1% estimate.
That "better than expected" data helped to support the JPY for a bit, but only temporarily. Technical levels played a role in stalling the JPY rise.
For example, the USDJPY found support against a trend line on the hourly chart connecting the Nov 18 and Nov 28th lows. That trend line cut across at 111.56 and the low for the day stalled at 111.60. As European traders look to enter for the trading day, that trend line support comes in at 111.67. The 200 hour MA at 111.457 (and rising) will be another key level below. The price of the USDJPY has not traded below that MA since November 9th (US Election result day). On the topside the 100 hour MA at the 112.513 remains as a level to get above if the buyers are to take control.
Another key JPY pair that found support on the early session dip was the EURJPY. This pair stalled right at the 200 day MA at the 118.545 level. Being able to hold that level increases the MA's importance gong forward. Stay above, and the buyers/bulls remain in control. Move below, and there could be some further corrective selling. ON the topside for the EURJPY if this pair is going higher it needs to retake the 100 hour MA at the 119.119 level currently. I like the bounce off the 200 day MA, but there is some work to do for the buyers in this pair.
The EURUSD has been trading up and down in the new trading week. In trading in the Asian Pacific session, the pair started by moving higher, but reversed lower as the day progressed. The low for the pair stalled right at the 100 hour MA at the 1.05867 level. Like the EURJPY which bounced off it's 200 day MA, the holding of the 100 hour MA, shows buyers on the dip. That is the bullish news. The not so bullish news, is the 200 hour MA looms above at the 1.06092. Yesterday, the price zoomed above that MA line but later failed and tumbled lower. In the early hours of today's trading, the pair moved above the MA again only to fail once again. So if those buyers off the 100 hour MA below are to take more control in the European session, they need to get - and stay - above the 200 hour MA at 1.06092.
Other interesting pairs of note is the USDCAD. Governor Poloz spoke a lot about the fuzzy economic picture in Canada and about the potential for shocks and what that might mean as far as monetary policy (using other tools in their toolbox). To me, the words were a bit more dovish. Also the USDCAD was finding some good support at the 1.3400 level. That level will be eyed in the new trading day as a risk level for longs/buyers. ON the topside, the 1.3466-74 are where the 200 and 100 hour MA are currently located. Key area above.
The AUDUSD made new highs going back to November 17th and in the process extended above the 38.2% of the move down from the November high at 0.74889. If this pair is go higher it needs to get and stay above that level going forward.
Below is a snapshot look at the % changes of the major currencies vs each other. In the early hours of the new trading day, the NZD is the strongest and the GBP is the weakest. However, the changes are quite small.
