Forex news for US trading on August 1, 2016

  • US stocks end the day mixed
  • Economic data due from Asia today - RBA day!
  • Japan GDP rose 1% in June
  • WTI futures settle at $40.06, down 3.70%
  • France bans forex advertisement
  • US Fed Senior Loan Officers survey show banks tighten loan standards
  • Nikkei Headline: Japan sees 1.3% GDP boost in a few years from new plan
  • USDCAD hanging near highs as Crude oil tests $40 per barrel
  • Italy leads the losers at the European close
  • Have shorts pushed the pound as far as it will go?
  • EURUSD extends NA session range....
  • USDJPY falls but rebounds after softer ISM
  • July's manufacturing report was nice and well balanced says ISM's Holcomb
  • June 2016 US construction spending -0.6% vs 0.5% exp m/m
  • July 2016 US ISM manufacturing PMI 52.6 vs 53.0 exp
  • ECB QE count: Bought €16.49bn vs €17.45bn prior
  • July 2016 US Markit manufacturing PMI final 52.9 vs 52.9 exp

The USD rebounded modestly today after last Friday's GDP induces fall (GDP came in much weaker than expectations at 1.2% vs estimates of 2.5%). Today on the economic front in the US the Markit Manufacturing PMI came in as expected at 59.2, but Construction spending fell -0.6% (vs +0.5% estimate). The ISM manufacturing came in at 52.6 vs 53.0 estimate with employment slipping back below the 50.0 level (49.4 vs 50.3 last month). The market for the most part - ignored the data. It was a quiet day.

The largest gain for the greenback came against the AUDUSD. In late day trading the pair fell sharply toward the 100 hour mA at the 0.7529 level. The RBA decision is in the new trading day and the market is expecting a cut in rates to 1.5% from 1.75%. Should the marker price get below the 100 hour MA, the next major targets are the 0.7506 and then the 100 day MA at 0.7487. A fall below each and it is open road ahead. If the RBA does not cut, look for a move above the 0.7575 level to give traders more of a bullish bias (see green and red arrows on the chart below).

The GBPUSD was under pressure on the back of a weaker Markit PMI data in the London morning session. In the NY session a correction took the price toward the 50% of that intraday move lower (at 1.3216) only to have sellers waiting to sell. Activity was slow with support against the 100 bar MA at 1.3195, but after a break, the price rotated back to MA support against the 100 bar MA on the 4-hour chart, the 200 hour MA and the 100 hour MA. Those levels come in at 1.3167 to 1.3177.

The EURUSD traded in a 28 pip trading range all day. That is one pip off the record low trading range for the year (27 pips on March 25th). The pair traded most of the NA session above the 100 and 200 bar MA on the 5-minute chart, but over the last few hours, more selling pushed the bias back to the downside.

The USDCAD rose on the back of weaker oil prices today. Crude oil fell below the $40.00 a barrel price and that is good enough to keep the bid in the pair. IN the new trading day, a move above the 100 and 200 hour MAs at 1.3135 will be eyed.

The USDJPY traded in a 38 pip range for the NY session in an up and down action. The low in the session took out the low from the London morning session by 2 pips but the break was quickly rejected. That level will be earmarked as a key level in the new trading day.

S&P index was down modestly (-0.13%). The Nasdaq was up 0.43%. Oil prices were down -3.75% to just over $40.00 (it traded below the $40 level for the 1st time since April). Gold was up +0.3%. Bond yields rose. Chase's CEO Jamie Dimon said he would not own 10 year bonds. The 10 year yield rose to 1.518%, up 6.5 basis points.