Forex news for FX trading on May 11, 2020
- Mixed results from the major indices today
- Feds's Quarles: Financial market strain has eased after Fed action
- WTI crude oil settles at $24.14
- ECB Rehn: German top court is trying to interfere with the independence of the ECB
- More from Fed's Evans: Very important to get public health safety issue solved
- Saudi energy minister: Cuts in output are designed to expedite rebalancing
- US treasury sells $42 billion of 3 year notes at a high yield of 0.230%
- Chicago Fed Pres. Evans: GDP growth will return in the 2nd half
- Atlanta Fed Bostic: Not really a big fan of negative rates
- European shares close the day lower
- The bullish and the bearish from the Bitcoin charts
- Canada announces new measures to aid businesses impacted by Covid-19
- Mnuchin on CNBC: Fed, treasury action will have big impact
- The USD is the strongest and the NZD is the weakest as NA traders enter for the day
- Saudi Arabia to reduce crude oil production by an extra voluntary amount of 1 mil bpd in June
In other markets:
- Spot gold is trading down $5 or -0.3% at $1697.80. The precious metal traded above and below the $1700 level with a high price at $1711.70 and a low price of $1691.99
- WTI crude oil futures for July delivery trading at $25.56. That's down $0.61 or -2.33%. Like gold the price of crude oil is trading near the middle of its trading range. The high price reached $26.73. The low price extended to $24.79.
In the US stock market today the major indices close with mixed results:
- The NASDAQ index was higher by 0.78%
- The S&P index was unchanged (up 0.01%)
- The Dow industrial average fell by at -0.45%
Bitcoin, after trading above $10,000 last Friday and on Saturday started to give up chunks of the gains. The price traded as low $8185 today (on the Coinbase exchange). That low was just above the Sunday session low at $8106.70.
The ranking of the major indices in the US today had the USD as the strongest of the major currencies, while the NZD was the weakest. There was a some risk aversion on fears of increased trade tensions between the US and China. The White House's Peter Navarro was on CNBC early in the day saying that "the bill must come due" to China for hurt caused by the virus. Over the weekend, there were rumblings about how China be better off with a new trade deal.
The day was void of any economic releases. Fed officials were chirping with Atlanta Fed's Bostic, Chicago Fed Pres. Evans and FOMC member Randy Quarles all speaking. Fed's Bostic said that he's not a big fan of negative rates. Fed's Evans says that he does anticipate the Fed easing negative rates. FOMC member Quarles did not speak about the possibility of negative rates, but did said that more may be required of the Fed before current crisis ends. Last week some of the Fed funds futures contracts in 2020 and 2021 moved above the 100 level indicative of negative rates.
A look at some of the major indices from a technical perspective shows:
- USDJPY: The USDJPY trended to the upside today and reached just above the 200 bar MA on the 4-hour chart at 107.674. The high price reached 107.76 before some end of the day profit-taking sent the price back below the aforementioned moving average. In the new trading day that moving average will be a bias defining level. Move back above and the bulls are in full control. Stay below and the sellers remain in control.
- EURUSD: The EURUSD is trading to a new session low into the close and testing the 1.0800 level in the process. The pair traded above and below the 100 hour moving average (currently at 1.08229). In the new day if the price can remain below that 100 hour moving average, sellers remain in control. On the downside, the low price from last week comes in at 1.0766 and would be a target on further weakness in the new day.
- USDCAD: The USDCAD moved higher on the dollar strength but initially found resistance against its 200 and 100 hour MAs (currently at 1.4012 and 1.4016). After ping-ponging between the 100 hour moving average above and the 38.2% retracement on 2 separate occasions, the price was able to extend above the upper extreme on its way to a high of 1.4041.. Late afternoon selling pressure took the price back to the moving average levels where the market is ending the day. Those moving averages (between 1.4012 and 1.4016) will define the bias. Move above is more bullish move below is more bearish.
