Forex news for North American trading on November 12, 2020
- US stocks close lower. Dow and S&P close down 1%
- Oil slips for the second day. What's next
- Judy Shelton may be confirmed to the Federal Reserve (vote Tues or Wed)
- US federal budget deficit for October $-284 billion vs. expected $-274.5 billion
- US treasury auctions off $27 billion of 30 year bond at a high yield of 1.680%
- France PM Castex: One person is being admitted to hospital every 30 seconds with Covid
- Headlines from ECB forum with Fed's Powell, BOE Bailey, and ECB Lagarde
- European shares break 3-day win streak
- White House: Stepping back from stimulus negotiations
- UK Covid cases rise to 33,470. New record high
- Senate leader McConnell: Vaccine process to proceed with lifesaving urgency
- DOE crude oil inventories +4277K vs -1900K est.
- German fin minister Scholz: Partial lockdown in November will cost Q4 growth
- US initial jobless claims 709K vs. 731K estimate
- US October CPI +1.2% y/y vs +1.3% y/y expected
- The CHF is the strongest and the GBP is the weakest as NA traders enter for the day
In other markets:
- Spot gold is up $10.60 or 0.57% at $1876.35.
- Spot silver is down $0.01 or -0.05% at $24.26
- WTI crude oil futures are down $0.43 or -1.04% at $41.02
The US CPI for the month was unchanged while the year on year level came in lower 1.2% vs. 1.3% estimate and 1.4% last month. Taking out food and energy, the consumer inflation fell to 1.6% from 1.7%. The Federal Reserve would like to see inflation increase above 2% and stay above 2%. The numbers today support the Fed's assertion that inflation will keep the Fed policy unchanged for an extended period of time (perhaps years).
That reminder did not help equity's today as they fell across the board. Both the S&P and the Dow industrial average fell around 1% on the day. The NASDAQ index declined by -0.67%. European shares also broke their 3 day win streak with declines across the board today. France's CAC was the worst performer with a decline of -1.52% Fears of Covid pandemic accelerating out of control, can raise its ugly head at the time, and can we can stocks on fears of slower growth.
Below is the ranges and closes for the major indices in North America and Europe.
Fed's Powell, Bank of England's Bailey, and ECB's Lagarde all participated in a ECB forum. Each tried to be a little bit upbeat (Powell: vaccine good news for medium-term. Bailey: vaccine might start to reduce uncertainty. Lagarde: clearly seeing a little less uncertainty), but reserved some judgment for the economic risks from Covid.
In the forex, the GBP is ending the day as the weakest of the majors for the 2nd consecutive day. Yesterday, the GBPUSD fell to the 100 hour MA and stalled. Today the pair fell below the 100 hour MA at 1.3197, stayed below and moved to the 200 hour MA at 1.31104 and stalled. The pair is trading just above that level into the new trading day (and it will be the barometer for the buyers and sellers in the new day).
The JPY was the strongest with most of its gains vs the GBP, CAD, AUD and NZD. All the commodity currencies were lower led by the AUD.
The USD is ending the session with gains vs the GBP, CAD, AUD and NZD. It fell vs the EUR, JPY.
Some technical levels to watch as we head into the last day of the week:
- NZDUSD. The NZDUSD is dipping below its 100 hour moving average at the 0.6842 level into the Thursday close. That is the 1st dip below the moving average level since breaking above back on November 4 near 0.6636. Stay below, would keep the sellers more control. Close risk comes in at the high from Monday's trade and an earlier intraday low from today at the 0.68543 level.
- EURUSD: Traders in the EURUSD used the 100 hour MA above at 1.18191 to slow the rally and the 50% retracement of the move up from the November 4 low at 1.17606 stalled the fall. The pair is closing just above the 1.1800 level. The 200 hour MA at 1.17782 (and rising) is also in play. Those 2 MA levels will be close support and resistance in the new day.
- GBPUSD: As mentioned above, the GBPUSD stalled the fall near the 200 hour moving average at 1.31104. That level will be the barometer for both buyers and sellers in the new trading day. Stay above is more bullish. Move below and the dip buyers will likely sell (along with new sellers).
- USDJPY: The USDJPY wandered modestly lower and in doing so, is giving the 100 hour MA a shot to catch up to the price. The 100 hour MA comes in at 104.947 and rising. The current prices still above the 105 level at 105.116. However, in the new trading day, the 100 hour MA may come into play. Be aware.
