Forex news for NY trading on March 1, 2017

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A snapshot of end of day levels

  • S&P up 1.37%, Nasdaq up 1.35%, Dow up 1.46%
  • US yields are higher: 2 yr up 2.4 bp, 5 year up 6.1 bp. 10 year up 6.4 bp. 30 year up 6.4 bp
  • Spot gold +$1.08 or 0.09%
  • WTI crude oil $53.67 -$0.34 or -0.63%

He was on point. He kept to the script. He was more positive. He crumbled some of the wall that pitted the Democrats and the Republicans. He even got rid of the solid red tie for a striped one, and wore a better fitting suit (although Pence and Ryan were basically wearing the same thing. UGH.).

Yes Donald Trump was more presidential. He said the right things and the stock market liked what they heard. The major indices gapped to new highs and tacked on 1.35% to 1.45%. Not a bad day for stocks.

Meanwhile over in the bond market, yields moved higher on the back of expectations for higher growth and a tighter Fed. Yields in the 10 year are up to 2.456% BUT let's remember, the high water mark in December was up at 2.61%. So although rates are up from last weeks 2.30%,, they still are in a range. Could the Fed and the Trump-o-nomics steer the Star Ship Enterprise to a smooth steady landing without runaway inflation? The markets seem to be thinking everything will be ok - even with a March FOMC hike. Time will tell.

As far as data goes, US PCE came in at 1.9% vs 2.0% with Personal income up 0.4% (that is good) but spending was up a lower 0.2% vs 0.3%. Later ISM manufacturing data showed it's index moved up nicely to 57.7. According to ISM Holcolm that is good enough for 4.5% GDP. HMMMM Time will tell on that too. PS the Atlanta Fed GDPNow model showed GDP for 1Q is at 1.8% instead of 2.4%. Once again, time will tell.

For the USD, the greenback rose against all the major currency pairs with the exception of the AUD.

Against the EURUSD the pair had a down and then up day, with the up nearly retracing back to the closing level from yesterday (at 1.0575). The high in the NY session was able to get up to 1.0571 which also happened to be the 50% of the move down from yesterday' high (which was also Monday's high at 1.0629). Staying below the 50% retracement will make that area a key resistance level in the new trading day. Moreover the 200 hour MA at 1.0574 and the 100 hour MA at 1.0576 (and moving lower), define risk for shorts in that 1.0571-76 area. Now all the shorts need is for the sellers to take the price below the 1.0500-1.0520 support area. If that can be done, the pair would once again be in the extreme area with visions of working toward the 1.0000 level - maybe (over time). FOMC and French election jitters (with technical bearish help) might just be the recipe to do the trick.

The GBPUSD decline (0.72%) was one of the bigger movers today. Today, the GBPUSD moved away from 100 day MA (at 1.24059) Traders have been toying with a re-break of that MA over the last 5 or 6 weeks. Until Monday, there had only been two closes below that MA line but each was only for that day. Yesterday we closed below it. Today we moved away from it. The sellers are showing their control. The 1.2252-59 area defined lows on Jan 18, 19 and 20. A move below that level, will be more bearish for the pair. A close-ish risk level for shorts (or target to get above if bullish) is 1.2347. That was the low from Feb 7th and was near a swing low on the way down today.

The USDJPY was up about 0.84% today in reaction to higher rates/higher stocks. Technically, the pair made it back above the 114.00 level (reached 114.04) before correcting in the NY session. On the correction, the pair was able to stay above the 200 bar MA on the 4-hour chart which is currently at 113.36. That MA was broken in the Asian session and stayed above for the rest of the trading day. For traders, if we stay above that MA, the upside is more bright for the pair. A move below in the new trading day and traders who are long, might become a little more fearful (leading to a test of the 113.00 to 113.14 area.

RBNZ Wheeler came out toward the end of the NY session and said that risks were about equal but the NZD was still too high (I guess it might be a habit to say that). The market ignoring that comment, started to move higher and paused against the 50% of the move down from Tuesday's high at 0.71679. Stay below keeps the bears more in control. Having said that, the 200 day MA at 0..71446 and the 100 day MA at 0.71317 may have a say into more bullish or more bearish. Traders took the price below both MA in trading on Wednesday but could not sustain the bearish momentum. If the price is to go lower, getting and staying below those MAs will be needed.

Below is a snap shot of the % changes of the major currencies vs each other.