Forexlive Americas FX news wrap: EURUSD advances on Catalan relief
Forex news for NY trading on October 10, 2017.
- US major indices close higher. Dow closes at record high.
- Forex technical analysis: Gold extends to the upside for the 3rd day in a row...
- Tide slowly turns for the US dollar -- three themes
- Sears Canada to liquidate, putting 14,000 employees out of work -- what it means
- Crude oil futures settle sharply higher
- The case for a BOE November hike strengthens further - BTMU
- White House: President has reached a decision on Iran strategy
- BOC's Wilkins: The main vulnerability in Canada is household debt
- Spanish government says Catalonia declared deferred independence - report
- Euro climbs after Puigdemont calls for dialogue, doesn't declare independence
- Puigdemont speech: Catalonia is now a European issue
- Rising inflation certainly wasn't a theme at the Wal-Mart investor day
- Pro-independence party rejects text of Puigdemont speech - report
- Trump says he will adjust tax plan over next few weeks to make it stronger
- NY Fed survey: Expected household income growth falls to lowest since Feb 2014
- When people believe enough to do this, you know it's going higher
- Oct IBD/TIPP US economic optimism falls to 50.3 vs 53.4 prior
- US stocks hit record but tax jitters could weigh as Trump-Corker feud flares
- IMF upgrades global growth forecast in 2017 and 2018
- Canada August building permits -5.5% vs -1.0% expected
- Canada Sept housing starts 217.1 vs 212.0K expected
- The strongest (EUR) and weakest (USD) as NA traders enter for the day
In other markets today, the end of day prices show:
- Spot told up $4.70 or +0.36% to $1288.54
- WTI Crude oil is trading up $1.36 or 2.76% to $50.94
- US stocks closed higher with Dow closing at a record high up 0.31%. The S&P is ending up 0.23% and the Nasdaq is closing up 0.11%
- US interest rates are ending lower, but off the lows. 2 year yield 1.5042%, Unchanged. 5 year 1.9462%, down 1 bp. 10 year 2.3463%, down -1.2 bp. 30 year 2.8848%, down -0.9 bp
Little in the way of economic data today. The US had Investors Business Daily/TIPP economic optimism index come out weaker than expectations. It is not a big market mover and it had a limited impact on the trading.
Canada got back in the swing of things after the Thanksgiving Day holiday yesterday. Housing starts were better than expected, while building permits were much lower than expectations at -5.5% vs-1.0% estimate.
Other than that, the IMF did upgrade global growth forecasts for 2017 and 2018.
- Sees 3.6% global growth in 2017 vs 3.5% in July estimates
- Sees 3.7% growth in 2018 vs 3.6% in July estimates.
The bigger event was out of Cantalan where President Puigdemont was to announce whether they would declare independence from Spain or not. He ended up not going "all in", but declared a deferred independence. The door remains open for talks between Spain and the region. The can was kicked down the road but the EUR was supported as a result of the decision.
Looking at the % changes of the major currencies vs. each other, the EUR was the strongest, while the USD was the weakest.
That combination makes the EURUSD the biggest mover at 0.63% change. Technically, the price action moved up to tests the 100 bar MA on the 4-hour chart at 1.1822. That resistance area held after the Cantalan decision. The price action post the decision did see a rotation lower, but the 1.1800 level held support. In the new trading day get above 1.1822 would be more bullish. ON the downside, fall below the 1.1800 would likely solicit more selling.
The USDJPY fell for most of the day and in the NY session broke below floor support between 112.208-316. That area was home to a number of swing levels (see post here). However, yields in the US which were down about 3-4 basis points, started to rebound and with the rebound, the USDJPY started to move back higher. The pair is closing back above the 112.208-316 area.
The GBPUSD continued it's move higher as thoughts of tightening sooner rather than later take hold (see post here). Technically, the pair moved back above the 100 hour MA at 1.3144 and now looks to take out the 200 hour MA at 1.32334. Those levels become the key technical levels to eye in the new trading day. Overall, the GBPUSD was up a decent 0.5% on the day.
For AUDUSD traders, the pair spent a lot of time trading a little above its 100 day MA at 0.77894. There were 6 separate hourly bars where the price traded above the MA level but the highest high could only get to 0.7796 (7 pips above the MA level). The last couple of hours saw the price rotate lower. If the pair is going higher, getting back above the 100 day MA is key. ON the downside, a move below the 0.77307-55 remains a key area of support. Going back to August 2016, that area was a key swing area (see post here). The low on unemployment Friday stalled just ahead of the low level at 0.7733. The last two days saw higher lows at 0.7746. IF the price is going lower, that level needs to be broken and stay broken.