Forex news for North American trading on only 17, 2020
- NASDAQ closes at a record level
- Crude oil futures settle at $42.89
- Hurricane watch continues in the Atlantic with two systems in play
- Meadows says hasn't spoken to Pelosi in a week
- CDC reports and 41,893 new cases vs. 54,686 in the previous report
- Florida Gov. DeSantis says the state has smallest case count since mid June
- Gold continues higher and tests its 200 hour moving average
- Some good news on the Covid statistics and news
- European shares end the day with mixed results
- Why the US dollar continues to fall
- White House advisor Navarro: China is keeping their word on purchases
- August Empire Fed manufacturing index +3.7 vs +15.0 expected
- US NAHB housing market index 78 vs 73 expected
- The JPY is the strongest and the NZD is the weakest as NA traders enter for the day
A quiet day on the economic front US Empire manufacturing index came in weaker than expected +3.7 vs. 50.0 expected. The NAHB housing market index rose to 78 from 73. Those were the only two economic releases to economic releases in the North American session today.
The US dollar (see rankings of the major currencies above) was the weakest of the major currencies, but declines were relatively modest. The AUD was the strongest of the major currencies as it gained on the back of strong metals.
- Spot gold rose by $39.58 or 2.03% to $1984.70 near the close
- Spot silver is trading up $1.02 or 3.88% at $27.47
The gains and gold can be attributed to reports that legendary investor or buffet took a position in Barrick Gold the 2nd quarter. There stock was up over 11% on the day and helped to push up the spot gold price as well. Higher gold gold helped to contribute to the lower dollar trend perhaps. Other commodity currencies rose as well with the Canadian dollar being supported by stronger oil prices on the day. WTI crude oil futures trading up $0.84 or 2.0% $42.85 for the September contract.
In the US stock market today the NASDAQ index closed at a all-time high of 11,129.72. That was up 110 points or 1.0%. The gains did not trickle down to the Dow industrial average which fell by -86.11 points or -0.31% to 27844.90. The NASDAQ flirted with closing at a record level at 3386.15 but backed off into the close. It settled at 3381.91 up 9.14 points or 0.27%. Financials were lower on the day as the official word that Warren Buffett liquidated a number of financial positions.
Also hurting financials were the fall in yields in the US today. In the US debt market, the 10 year yield fell by -2.3 basis points and the yield curve flattening (2's vs. 10s) by close to 3 basis points. Lower yields also helped to contribute to the weaker greenback.
The USDJPY started state near the its 100 hour moving average up at 106.60 but started to decline steadily into the London session. In the New York session its 200 hour moving average is broken at 106.213 and that helped to move the price below the 106 level into the close. The low for the day reached 105.937. Stay below the 200 hour moving average at 106.213 would keep the bears more in control.
The EURUSD managed to push above last Thursday's high at 1.1863 and extend the range in the New York session up to 1.18804. That was short of the next minor resistance target up near 1.1885. Close support for the pair comes in between 1.1861 and 1.1867 in the new trading day. The price can stay above that area the buyers would be poised for a test of the 1.1885 level, with a break next targeting the end of July and early August high prices between 1.1904 at 1.19153. Recall on Friday that the speculative long position in the EUR was at record levels. The traders have been riding the EUR strength to the upside (and adding to that position over the last few weeks at a healthy pace as well).
There was nothing particularly inspiring in the trading of the GBPUSD today. There were a line of up and down hourly bars with the current price trading just above the 1.3100 level near the close. The one technical clue came when the price held above its 200 hour moving average 1.30856 early in the New York session. The ability to stay above that level helped to give the pair a more bullish bias (although subsequent price action was choppy at best).
As mentioned above, the USDCAD fell (stronger loonie) helped by sharply higher oil prices (up 2%) the low price for the day came in right near the low price from last week at 1.31913. Sellers could not push the price below that level and we have seen a modest rebound into the close with the price currently trading back above the 1.3200 level at 1.3205.
The virtual Democratic national convention will begin in earnest tonight. Sen. Bernie's and former First Lady Michelle Obama will be headline speakers.
