Forex news for North American trading on November 1, 2021
- New records for the 3 major indices (again)
- U.S. Treasury borrowing much greater than expectations
- WTI crude oil settles at $84.05
- Gold continues to frustrate the bears and the bulls
- One day this might be tradable data
- Manchin: Will not yet support reconciliation bill
- RBA up next. Recent AUD gains built on a shaky foundation - MUFG
- Manchin statement coming on $1.75T reconciliation bill at the top of the hour
- $120 oil may be only seven months away
- Treas. Sec. Yellen: Uncertain of the lasting nature of drop in labor force participation
- Atlanta Fed GDPNow rise to 8.2%
- New highs for the NASDAQ index. Dow cracks 36,000 for the first time.
- A sobering look at the shipping crisis
- OPEC output disappoints in October - survey
- This week should reinforce a tactical bullish setup for USD - TD
- MUFG trade of the week: Sell EUR/USD
- ISM October manufacturing 60.4 vs 59.2 expected
- US construction spending for September -0.5% versus 0.4% estimate
- US Markit final Oct manufacturing PMI 58.4 vs 59.2 exp
- Canada October Markit manufacturing PMI 57.7 vs 57.2 expected
- The NZD is the strongest and the JPY is the weakest as NA session begins
- ForexLive European FX news wrap: Dollar mixed as markets keep the calm
The US dollar moved modestly lower with the main declines versus the CHF, EUR and NZD. The greenback gained against the GBP (which had traders worried about France/UK fishing license rights tensions). The dollar was little change verse the JPY and the AUD - ahead of the RBA decision in the new trading day.
Fundamentally today, The Markit final PMI came in weaker than the preliminary of 58.4 versus 59.2, but the ISM manufacturing index was slightly better than expectations at 60.4 versus 59.2.
With the US employment report coming out on Friday, the manufacturing employment component did rise to 52.0 from 49.6 expectations and 50.2 prior. Meanwhile, supply chain issues, continue to put pressure on prices. Prices paid moved sharply higher to 85.7 from 81.2 last month while new orders declined to 59.8 from 66.7 prior.
The ISM commented that supply chain issues continues to produce major head winds every day. With demand remaining strong, it is is leading to higher prices.
In other fundamental news, US construction spending was a weaker on the month coming in at -0.5% versus +0.4% increase expected. Both private and public construction showed declines with private construction falling -0.5% of public construction falling -0.7%
In other markets going into the close:
- Spot gold is up $10.19 or 0.56% at $1792.96. The ups and downs continue to frustrate both the buyers and sellers.
- Spot silver is trading up $0.17 at $24.04
- WTI crude oil is trading up near $84, up $0.43 on the day
- Bitcoin traded as high as $62,500 but is trading lower at $60789.
In the US stocks market, the major indices closed higher and at record levels for all three major indices. The Nasdaq rose 97.54 points or 0.63% leading the way to the upside (of the major 3). The S&P was the laggard with a gain of 0.18%. The small cap Russell 2000 outpaced the big boys with a gain of 2.65% and is up over 5% over the last month of trading.
In the US debt market, the yields are ending with mixed results after retracing earlier gains in yields. The 5 year is down -0.7 basis points at 1.1815% after trading as high as 1.227% earlier in the session. The 10 year is up only 0.5 basis points at 1.561% after trading as high as 1.605%
A look at some of the major currency pairs is showing:
- USDCHF: The USDCHF was trend like in the US session. The pair fell below the 200 day MA at 0.9149 soon after the US open and did not look back. The pair has also moved below the 50% midpoint of the 2021 low to high trading range at 0.91144, and the last swing lows from August 17, August 30 and on Friday near 0.9100. The low reached 0.9087. In the new day, the 0.9100 is the closest risk followed by 0.91144. Stay below and the tilt remains in the sellers favor.
- EURUSD: The EURUSD was another pair that had trend like move to the upside (lower USD). For it, it moved above a swing area between 1.1580 to 1.1586 and then the 38.2% of the move down from last Thursday's high at 1.15946. The high price did stall near the 100 hour MA at 1.16076. In the new day, if the buyers are to take more control, getting above the 100 and 200 hour MAs at 1.16076 and 1.1619 would be required. Absent that, and a move back below the broken 38.2% at 1.15946 would be targeted.
- USDJPY: The USDJPY had an up and down day with the price rotating back toward the 100/200 hour MAs at 113.88. The NY session low reached 113.93. The high price for the pair reached 114.43 which got within swing high from Oct 15 and Oct 18 at 114.457. The converged 100/200 hour MA will be the barometer for the buyers and seller in the new trading day. Move below, would be more bearish. Stay above and the sellers may look to buy again. Overall, the pair is near the middle of a range with a low at 113.21 and high at 113.691 (over the last 14 trading days). At some point, the pair will make a break for it and run, but for now, the price trades near the middle of that range (and near the MAs).
- AUDUSD: Going into the RBA meeting results (no change expected), the AUDUSD trades off the 200 day MA above (at 0.75549), and near the 100 hour MA at 0.75187 and 200 hour MA at 0.75058. A move below those hourly MA would have traders targeting the 0.7475 and then lows from October 22 at 0.7453. A move above the 200 day MA would open the upside for more upside momentum. The RBA has said that rate rises won't happen until 2024. However, although they could tighten that expectations up a bit, they can't go too far without losing credibility. ON a positive front, after shutting its international borders for nearly 600 days due to the pandemic, Australia welcomed its first group of foreign visitors on Monday as the country started to gradually lift restrictions again.
