Forex news for North American trading on June 17, 2021
- Major indices close mixed with the Dow down, the S&P flat, and the NASDAQ higher
- Oil finishes 1.5% lower but well above the worst levels of the day
- Bitcoin falls to the lows of the day
- The reflation trade takes a beating but is it dead?
- Dow down -400 points
- European indices end mixed
- The message from the 30-year bond is that the Fed won't allow inflation to run
- Crude oil falls lower after breaking 100 hour moving average
- ECB's Weidmann: PEPP should end soon
- Gold hits a new low. Approaches 61.8% retracement of the April-June rally
- UK reports 11,007 covid cases -- highest since February
- US home builder Lennar sees no slowdown in housing market
- Lumber futures fall below its 200 day moving average as the decline continues
- Iran lead negotiator says fundamental issues remain in nuclear talks
- ADP Canada May employment 101.6K vs 101K prior
- Democrats could spend as much as $6 trillion on infrastructure package - report
- US Initial jobless claims 412K versus 360K estimate
- May Canada Teranet house price index +13.7% vs +11.9% y/y prior
- June Philly Fed 30.7 vs 31.0 expected
- The Fed blinks, what's next?
- The USD is the strongest and the CHF is the weakest as NA traders enter for the day
The USD kept it's run higher going today after surging after the FOMC meeting a little over 24 hours ago.
The greenback moved higher vs all the major currencies with the exception of the JPY. The yen is the strongest of all the major currencies today with it's biggest gain vs the CHF at 1.34%. The JPY was higher by over 1% vs EUR, CHF, CAD, AUD and NZD and 0.85% vs the GBP. The change vs the USD was 0.37%.
For the USD gains were decent as well with rises of 0.48% to 0.98% (for the USDCHF). The CHF was the weakest of the majors as flow of funds moved out of that currency.
The last 5 days, the USD has risen against all the major currencies. The greenback has been the strongest versus the NZD (+2.8%) and AUD (+2.67%). It rose by 2.53% vs the CHF, 2.185 vs the EUR and 2.15% vs the CAD.
The move higher in the USD came despite a move down in interest rates today. That was not the case in early trading but in the NY morning session, yields started to move lower with most of the moves coming out the curve. The shorter end remained less impacted. At one point, the 30 year was down over 15 basis points on the day to a low yield of 2.047%. The yield has since moved back up to 2.108%. For the 10 year, the yield low reached 1.470%. The current yield is 1.514%. That is still down -6.1 basis points on the day. In contrast the two year yield is up one basis point to 0.215%.
In other markets:
- Spot gold fell sharply helped by a higher dollar. The price is down around $40 or -2.21% $1771.38. The low price reached $1767.34 while the high was at $1825.35.
- Spot silver is trading down over $1.08 or -4.04% at $25.89. It had a wide range of $27.24 as the high and $25.77 is a low
- WTI crude oil futures felt $-1.23 or -1.72% at $70.91. The high price reached $72.30. The low extended to $69.77.
- The price of bitcoin traded above and below unchanged on the day. The current price is at $37,704, down $-830 or -2.13%. The high for the day extended up to $39,554.
Fundamentally today,
- the initial jobless claims came in much weaker than expectations and back above the 400K level at 412K. That was much higher than the 360 K estimate.
- The Philly Fed index came in near expectations at 30.7 (versus expectations of 31.0)
Technically speaking going into last day of the week:
- EURUSD. The EURUSD fell below 100 day MA yesterday but stalled near the 200 day MA at 1.1986 area. Today, after some up and down in the Asian session, the pair cracked below the 200 day MA and started another run to the downside. That run has now taken the price below the 61.8% of the move up from the 2021 low (end of March) at 1.19189. A swing area is around that retracement at 1.1915 to 1.1926. Stay below keeps the sellers firmly in control. A move above could lead to come Friday corrective action.
- GBPUSD: The GBPUSD is looking like it might close below the 100 day MA at 1.3933 (trading at 1.3922 now). If it closes below the MA it will be the first since June 30, 2020 (there were some trading below the MA in September 2020, but no closes below). If the price starts to trade more comfortably above that MA, there could be some corrective probing to the upside. Watch 1.3966 to .39759 for sellers (swing levels going back to end of April and early May). Stay below the moving average (or fail on a corrective move above), and traders will be targeting the swing lows from end of April/beginning of May at 1.3800 area.
- USDJPY: As mentioned, the JPY was the only currency that the USD fell against today, but the pair stalled the fall near swing highs from Tuesday's trade at 110.16 (the low reached 110.15). The 38.2% retracement of the move up from the June low is also in that area at 110.193. Just below those levels is the 100 hour moving average at 110.106. There have been some modest buying off the support area. I would expect some buyers to continue to lean against that area with stops on a break below. On the topside watch the 110.324. That was the swing high from June 4 (broken yesterday). The high off of the low just reached 110.314 just below that level. So there is a mini-battle going on between that level and down to the 100 hour MA at 110.106.
