Forexlive Americas FX news wrap: Retail sales disappoint
Forex news for North American trading on November 17, 2020.
- US Senate will be reconsidering Shelton's nomination all over again later this week
- Russell 2000 closes at record for the 3rd consecutive day
- The gold bugs really liked Judy Shelton
- Fed nominee Judy Shelton defeated in procedural vote
- Fed's Barkin: Economy facing a rough several months
- There isn't much standing in the way of Bitcoin returning to the highs
- US covid cases 151,855 vs 138,025 yesterday
- Powell: Recovery has significant downside risks in near term
- BOE's Ramsden: Question for the future is whether we would buy green bonds
- BOE Ramsden: We stand ready to take whatever additional action is necessary
- Atlanta Fed GDPNow estimate for 4Q rises to 5.4%
- European major indices close mixed on the day
- Lagarde repeats that ECB prepared to recalibrate measures
- OPEC's JMMC concludes without recommendation on cuts
- McConnell: Senate still wants to pass more covid aid
- NAHB US housing market index 90 vs 85 expected
- US Sept business inventories +0.7% vs +0.6% expected
- New Zealand GDT price index +1.8%
- US October industrial production +1.1% vs +1.0% expected
- Oil slumps on chatter about a three-month OPEC+ cut extension
- Fed's Bostic: Possible some people are starting to run out of money
- Canada wholesale trade sales for September 0.9% vs. 0.4% estimate
- US October advance retail sales +0.3% vs +0.5% expected
- Canada October housing starts 214.9K vs 220.0K expected
- The GBP is the strongest and the NZD is the weakest as NA trader enter for the day
In other markets:
- Spot gold him fell $-8.28 or -0.44% at $1880.83. The high price reached $1893.52. The low price extended to $1877.
- Spot silver fell $0.27 or -1.1% at $24.49. The high price reached $24.81. The low extended to $24.37
- WTI crude oil futures fell $0.14 or -0.34% to $41.20. The high price reached $41.69. The low price extended to $40.57
The day started on the defensive as the positive from the Moderna Covid vaccine news on Monday was replace more by concerns about slower growth from the global surging coronavirus cases/hospitalizations/deaths. That had risk/commodity currencies lower and more support in more safe currencies
Looking at the strongest to weakest of the majors the GBP and JPY battle it out for the strongest of the majors, while the AUD, NZD and CAD were weaker throughout the North American trading session. The USD started mixed and ended mixed with gains vs. CAD, AUD and NZD and declines vs the GBP, JPY, CHF and EUR. Below is the snapshot of the rankings near the close for the day.
Adding to the negative tone was disappointing retail sales for October 2020. The headline number came in at 0.3% vs. 0.5% expected. Ex auto came in at 0.2% vs. 0.6%. The control group was also weaker at 0.1% vs. 0.5%. In addition the visions were lower for September. Although one bad month is not make a trend, the numbers did not help the overall bias and concern about the economy. Nevertheless, it wasn't a disaster - the numbers were still positive - but it just wasn't great.
As a result of Covid and data concerns, the US stocks traded defensively today. The NASDAQ index was initially higher. It was helped by Tesla being added to the S&P index and news that Amazon would start offering prescription services. However, the Dow industrial average and S&P index opened lower and remained in the red for the entire trading day.
By the close, all 3 major indices closed lower, but off the lowest levels as well. The only US gainer was the Russell 2000 index up a small cap stocks which closed higher, and at record highs for the 3rd consecutive day. In Europe, shares were mixed with France and Italy moving higher while Germany, UK, and Spain closing lower.
In the US debt market, yields move lower on growth concerns. In addition the 2 – 10 year spread flattened about 4 basis points to 68.91 basis points from 72.90 at the close yesterday
A big winner today was the price of bitcoin which is up near $900 at $17,586. The gain since the September low has been nearly 80%.
A technical look at some of the major currency pairs shows:
- EURUSD: The EURUSD open near its high for the day and close to a topside trend line on the hourly chart at 1.1896. The high price reached 1.18932 before rotating to the downside. The pair stalled near a swing area between 1.1859 and 1.1868. That will be a barometer going into the new trading day. On more weakness, and upward sloping trendline on the hourly chart cuts across at 1.1848 (and moving higher). Move below that level and traders will be focus on the 100 and 200 hour moving averages down near 1.1828.
- USDJPY: The USDJPY fell into the New York opening (the high for the day was at 104.58) and in doing so cracked below the 61.8% retracement of the move up from the November 9 low. That level came in at 104.129. The low price extended to 104.065 before rotating modestly higher to a New York high of 104.244. The pair is closing near the 104.18 level. A move below the 61.8% retracement would target the low for the day.
- GBPUSD: The GBPUSD close yesterday near its 100 hour moving average (currently at 1.31905). The Asian session saw the price initially move higher but then correct into the European opening and retested that 100 hour moving average. When buyers leaned support and started to make upside progress, the sellers turned buyers and push the price above the high from yesterday at 1.3237 and to an intraday high of 1.32717. The New York session saw the price high from yesterday where buyers stalled the fall. The pair trades around 1.3245 into the close - still ahead of that high from yesterday. In the new trading day stay above the 1.3237 level, and buyers are more in control. Move below and the bias shifts a bit more to the downside.
- AUDUSD: In the new trading day, the key level to a high would be the 100/200 hour moving averages which are converged at 0.72783. Move below would be more bearish. The price currently trading around 0.7300. On the topside, the double top at 0.73392 would need to be broken to increase the bullish bias. Today's high stalled right at that level and rotated back to the downside.