Forexlive Americas FX news wrap: GBP squeezes higher into the weekend
Forex news for NY trading on January 11, 2019
- Major indices end down but only marginally
- Crude oil futures settle the week at $51.59
- Is the global economy suddenly fragile?
- The earnings season starts in earnest new week. Schedule of the major releases
- UK Cabinet ministers exploring options once May loses Jan 15 vote - report
- How much of the pound's gain is anticipation of Article 50 extension?
- Baker Hughes US oil rig count 873 vs 877 prior
- Fox Business: Trump to end impasse w/ govt emergency as soon as next week
- European equity close: Stocks slide to the downside but weekly gains solid
- Q4 New York Fed GDP Nowcast 2.48% vs 2.49% last week
- Trump laments 'humanitarian crisis' at border, calls it 'an invasion'
- 2013 Fed transcripts show how officials struggled with taper tantrum
- US December CPI +1.9% vs +1.9% y/y expected
- The NZD is the strongest while the USD is the weakest as NA traders enter
- S&P 500 closes near unchanged at 2596.26
- Gold rises $1.85 or 0.14% at $1288.50
- WTI crude oil is trading -$-0.88 or 1.67% at $51.71
The day today saw the GBP squeeze higher into the weekend for a change (there is often weekend Brexit anxiety). In fact, the GBP was the strongest of the major currencies today (see charts above). There was chatter about extending Brexit past the March 29th date. That - and favorable technicals - helped to move the GBPUSD to a high for the day, week and month of January (the high reached 1.2865). That high was the highest level since November 23rd, and got close to the 50% retracement of the move down from September high at 1.2875. If the momentum continues into the new week, the 100 day MA at 1.28914 is not that far away. The price has not traded above that MA since November 15th.A move above would be more bullish.
The GBPUSD rose by 0.77% on the day, but the biggest gain for the GBP today was against the EUR. The GBP gained 1.02% vs the EUR today. Technically, the pair has been trading in a 0.8921 to 0.9086 range over the last 5 trading weeks. Today, the price tumbled from near the high of that range, all the way to the floor. The price stalled right near the lower extreme. Leaving a potential break lower, for the new week. Be aware. the 0.8926 will help define the next bias for the pair in the new week.
The USDCAD today fell early, but then shot higher in the NA session. The bounce was helped by holding just above the Wednesday low at 1.1380 and also above the 100 day MA at 1.31684. The run higher moved above the 100 hour MA at 1.32458 in the North American session (and stayed above), reaching a high for the day at 1.3278 in the last few hours of trading. The price had not been above the 100 hour MA since January 3rd (5 days down to the Wednesday low). The move from January 3rd high took the price from about 1.3650 to the lows this week at 1.3180. The question next week is "Can the 100 hour MA hold and the corrective move continue?"
For the week, the NZD and AUD are ending as the strongest, helped by hope from the US/China meetings in Beijing. The JPY and the USD was the weakest. The USDs decline was helped by the softer tone from Fed officials and the FOMC December meeting minutes. Although Powell reiterated on Thursday that the Fed would be data dependent, he could stop himself from saying that the balance sheet would be "significantly lower" over time. In reality, that is tightening as well.
The stock market did not really like that talk. Nevertheless, the stocks 5 day winning streak was only broken today and that was by the slimmest of margins for the S&P (the S&P fell -0.1% today). What is somewhat ironic, is the gains came despite the record breaking government shut down. Below are the % changes of the major indices this week. The good news perhaps, is there was not a lot of economic statistics coming out to potentially ruin the run. Next week, the earnings calendar starts to heat up starting with financial's earnings on Monday, Tuesday, Wednesday and Thursday. Netflix will also be an early high flyer releasing earnings on Thursday.
For good order, the US CPI data was released as per expectations today. The impact on the release was limited.
Wishing you all a great weekend.