Forex news for North American trading on September 14, 2020
- Major indices close higher. The NASDAQ leads the way.
- Astrazeneca US vaccine trial remains on hold in US as regulators probe side effect
- Crude oil futures settle at $37.26
- Q3 GDP estimates continue to rise
- How USD will trade around this week's FOMC? - TD
- Johnson continues to double down on bill but says has no desire to use measures
- European shares end the session mixed
- OPEC+ monitoring committee unlikely to recommend changing course - report
- ECB's Lane: There is no indication that we're hitting the lower bound in rates
- EU set to delay UK access decision for euro clearing - report
- ECB's Makhlouf says he believes soft demand will lead to a fall in prices
- The GBPUSD is the strongest and the AUD is the weakest as NA trader enter for the day
As the North American session comes to a close, the USD is ending the day as the weakest of the major currencies. In reality it is tied with the neighbors from the north, the Canadian dollar with both showing cumulative declines exactly the same (vs the major currencies). The NZD was the strongest today. Although the US dollar is the weakest, the greenback did see some buying into the close.
Catalysts for the weaker dollar seemed to be on risk-on demand, and flows out of the safe-haven USD. There may also be some weakness ahead of the FOMC rate decision on Wednesday. The Fed will officially announce the new inflation averaging targeting that Chair Powell introduced at the Jackson Hole virtual summit. The net effect is that the Fed will likely stay on hold longer than even previously thought. There were no economic releases today in the US or Canada.
In other markets today:
- Spot gold rose in response to the lower dollar. The current prices up around $18 or 0.94% at $1958.54. The high price extended to $1962.56. The low price reached $1937.32.
- Spot silver is trading up $0.44 or 1.67% to $27.17. The high price reached $27.30. The low price extended to $26.68.
- WTI crude oil futures are trading near unchanged at $37.30. It's high price reached $37.68 while the low price extended to $36.82. The contract stayed below its 100 day moving average for the 2nd consecutive day. That MA comes in at $37.94.
In the US debt market, yields are modestly higher with the 5 year yield up 1.1 basis points. This week, the US treasury will auction off $22 billion of 20 year bonds bonds tomorrow at 1 PM ET p.m.
In the US equity market today, the US stocks rebounded to start the week. The major indices are trying to break a 2 week losing streak and got off to a good start today. The NASDAQ index led the gainers with a 1.87% increase. Below are the summaries for the North American and European major stock indices. The France's CAC led the way in Europe with a 0.35% gain.
Technically speaking for some of the major currency pairs as we head into the new trading day:
- EURUSD: The EURUSD is closing near midrange at 1.18593 (the pair is trading at 1.18617). The pair moved above its 50% retracement of the September trading range at 1.1881 on its way to the intraday session high of 1.1887. In the early Asian session, the price based against its 200 hour moving average currently converged with the 100 hour moving average at 1.1826. Those moving averages will continue to be important barometer is for the bulls and bears this week. Stay above is more bullish. Move below is more bearish. On the topside, the 50% retracement 1.1881 is near a downward sloping trendline on the hourly chart which currently comes in at 1.1884 (and moving lower). Extend above those levels in the new trading day would be more bullish and have traders looking toward the high from last week at 1.19165.
- USDJPY: The USDJPY had a non-trend week last week with a 59 pip trading range. That was the 2nd lowest trading range for a calendar week this year (the lowest was at 57 pips). IN trading today, the pair already surpassed last week's range with a 62 pip trading range today, with most of the price action to the downside. That is on par with the 22 day average. The move took the price away from its 200 hour and 100 hour moving averages at 106.14 and 106.067 respectively. The price also dipped below its low price from last week at 105.782. With the price currently trading at 105.726, that level will be eyed as close resistance. Stay below would be more bearish. Move below and there could be a further rebound higher in the new trading day. On the downside a move back below the swing low price from September 1 at 105.585 would be more bearish and should solicit more selling.
- GBPUSD: While the USDJPY was non-trending last week, the GBPUSD trended with a near 500 pip move to the downside. Today, the pair corrected higher with the pair testing its 100 hour moving average in the process. The price did extend above that moving average on two separate and successive hourly bars, but could not close an hourly bar above that level (the pair did extend above the moving average by 12 pips but stalled and reversed). The price is trading around 1.2841 at the close. The 100 hour moving average is currently at 1.2892. It will take a move back above the falling 100 hour moving average to take some of the bias away from the sellers. Failure to do that and the sellers remain firmly in control.
