Forex news for US trading on October 11, 2016
- US stocks end the day with big red numbers
- Central bankers/FOMC meeting minutes due tomorrow
- Crude oil futures end settle down on the day
- S&P bias could be turning from bullish to bearish today.
- Can the GBPUSD buyers win a battle?
- Post debate national WSJ survey has Clinton at 50%/Trump 40%
- Fresh lows of the day for USDJPY
- The focus is on the GBP pairs
- ECB's Mersch: We're it not for our policies, the economy would have been worse
- Let's let the US economy continue to create jobs says Fed's Kashkari
- GBP rally gets slapped again
- September 2016 US labour market conditions index -2.2 vs 1.5 exp
- The mood in the EU to keep IMF in Greek program is weakening - MNI
- OPEC's Barkindo: we are not targeting a specific price for oil
- Looks like someone's been on the phone to Rosneft about earlier comments
- The strongest and weakest currencies as NA traders enter for the day
- September 2016 Canadian housing starts 220.6k vs 190.0k exp
The GBP has taken center stage in trading again today. The GBP got spanked against all the major currency pairs with the GBPJPY and GBPUSD the pairs hit the hardest. Concerns about a hard Brexit AND rising US rates/higher rate hike probabilities helped to keep the pound under pressure and the USD supported.
For the GBPUSD, the pair was already down when NY traders showed up. However, a corrective move higher failed on move above a topside channel trend line (at 1.2287) and then a fall through lower trend lines at 1.2226 and 1.2204, helped shove the pair even lower in the NY afternoon. The selling did not slow down until the price hit 1.2087. For the day, the pair traded with 4 different 'big handles" (1.2300, 1.2200, 1.2100 and 1.2000). The range for the day was a healthy 283 pips.
While the GBP was the weakest, the JPY was the strongest. It seemed that pair was supported by the flows into the relative safety of the JPY trade. JPY crosses, led by the tumbling of the GBPJPY (down 2.17%) and a sharp fall in the NZDJPY and AUDJPY (down 1.44% and 1.13% respectively) were main moves. Although the USDJPY is ending the down down, it is also recovering into the NY close and looks to close right near the 100 day MA at 103.479. Last week, the price traded above the 100 day MA for the first times since early Feb 2016 and failed. Yesterday and today, the pair moved above once again and failed again. However, the rally back to the MA line at the close suggests the "market" is really not sure what it wants to do - i.e., follow the dollar higher or be the haven when stocks decline. We will see what the new day brings us.
The EURUSD had a pretty active day too (93 pip range which is good for it). It was not on par with the GBPUSD move but it was not bad. It too fell against the dollar and this was despite better ZEW economic sentiment numbers for Germany and the Eurozone (6.2 vs 4.2 and 12.3 vs 6.3). Nevertheless, the pair fell and closed below trend line support at the 1.1065 level (it is closing at 1.1053) Stay below, and there is potential for further downside momentum with a move below the 1.1044 opening up the downside for further probing.
In other pairs:
- The USDCAD has traded at some point above and below the 200 day MA line over the last 5 trading days. Today, it started below and moved above, helped by the stronger dollar and lower oil prices (down about -0.95%). The MA line is at 1.31975 in the new trading day.
- The AUDUSD was lower on the day and tested the 100 day MA at 0.7528. In September there was two closes below that MA line. Will buyers lean on the dip and buy it up, or see what life is like below the level? What do you fancy? Risk is defined and limited at the level.
- The NZDUSD moved further away from it's 100 day MA (at 0.71574. The current price is about 100 pips lower at 0.7055). Trend line support comes in at the 0.7010 level in the new trading day.
The US stock market ended sharply lower in trading today with the S&P down -1.24% and the Nasdaq down -1.54% and the Dow down -1.09%. Bond yields wer higher by 3-5 basis points with yields rising the most further out the curve.
Below is the snap shot of the strongest and weakest currencies in trading today. The JPY was the strongest, while the GBP was the weakest.
