Forex news for NY traders on August 16, 2018
- Dow stocks lead the way. Nasdaq stocks give up most of their gains
- Crude oil settled up $0.45 at $65.46
- How did you do last month? The numbers show that 76% of you lost money.
- Old news but for good order, the Atlanta Fed GDPNow steady at 4.3%
- Kudlow: China's economy "looks terrible"
- US Lighthizer: Hopeful for breakthrough on NAFTA within next few days
- US, Chinese officials say trade talks will take place on Aug 22-23
- More sanctions are prepared on Turkey if Pastor Brunson is not released.
- Italian shares suffer on bridge collapse but other European stocks recover today
- Mexican Economic Minister: Mexico is still working on NAFTA, but....
- 10 years of ForexLive, 10 memories #1: The Brexit vote
- Bank of Mexico minutes say majority sees inflation risks tiled to the downside
- Another sad day for music as Aretha Franklin dies
- Turkey's Albayrak says reducing inflation is top priority
- Dukascopy launches new wealth management partnership for clients
- Trump touts US economy in tweet
- Canada ADP July employment report +11.6K vs -10.5K prior
- US August Philly Fed +11.9 vs +22.0 expected
- Canada June manufacturing sales +1.1% vs +1.0% expected
- US housing starts for July 1168K vs. 1260K expected.
- US initial jobless claims w.e. 11 August 212k vs 215k expected
- The AUD and NZD are the strongest. The JPY is the weakest at the day's start
In other markets:
- Spot gold is down -$1.00 or -0.09% at $1173.85
- WTI crude oil futures are up $0.50 or 0.83% at $65.50
Stocks in the US ended the day higher with a rotation into the Dow stocks. Some of the high flying Nasdaq stocks like Facebook, Netflix, Alphabet, Nvidia ended the session lower. The big gainers in the Dow included Walmart, Boeing, Caterpillar and Cisco. European stocks ended higher with the exception of the Italian FTSE MIB which got hammered as a result of the bridge tragedy in Genoa.
US yields saw the front end rise modestly. The 30 year bond yield fell modestly.
In the forex market, the NZD and AUD were the strongest currencies of the day on "risk on" flows. In contrast, the CHF and the JPY were the weakest on flights out the safety of those two currencies. The USD was mixed on the day with the greenback higher vs the CHF, JPY and CAD, and down vs the NZD, AUD, EUR and GBP.
Fundamentally today,
- Iniitial jobless claims were as expected and continued to not be a problem.
- Housing starts and building permits are a problem as higher rates, higher prices and low supply are hurting the market.
- Yesterday the empire manufacturing data was better than expected. The Philly Fed index today was worse than expected.
- Canada Manufacturing sales were close to the expectations with a solid 1.1% gain.
The flows today were dominated mostly by the overnight news that US and China would talk. That led to the Pavlovian reaction of higher NZD and AUD and lower JPY and CHF. The USD tends to move sideways to lower and that is what it did today. Economic data had limited impact.
The news - along with favorable earnings from Walmart and Cisco and an upgrade of Boeing - sent the Dow stocks soaring, but later in the day, Larry Kudlow characterized China's economy as terrible and the US economy as "crushing it". That type of rhetoric did not really help some of the tech stocks and they drifted lower. Although the Nasdaq closed higher, some of the familiar names were lower (or gave up most of their gains).
We are heading into a Friday in the summer which can make price action even more random but here is the best stories for some of the technicals:
- The EURUSD moved back above its 200 week MA at 1.1356. IN the NY afternoon, the price move to a NY session low of 1.1347, but is closing back above the bullish above/bearish below barometer heading into the last day of the week. Does it matter given the summer market? I still consider it a barometer for bull/bear
- The USDJPY was a currency pair that saw a bunch of ups and downs in trading today. I am not sure I trust much in this pair but if I were to trade, I would look to buy near a support level (like the trend line on the hourly chart at 110.55) or a resistance level like 111.18. In between may be more random.
- The GBPUSD has the 100 hour MA bearing down on the price. That MA comes in at 1.2732 and although the price moved above that MA like it did on Tuesday, also like Tuesday, it failed quickly. The price is not racing lower - the 1.2661 is the low for the week and the year - and is the target to get below if the 100 hour MA cannot be broken.
- The USDCAD held support at the 100 hour MA today at 1.31218 and held under resistance at the week's highs at 1.31699 and 1.31742. Those are the extremes for traders to get above or move below (or bounce off of).
