Forex news for NY trading on December 18, 2018

In other markets:

  • Spot gold moved higher by $3.65 or 0.29% at $1249.55
  • WTI crude oil got hammered. It trades at $46.26 in after hours trading, down -$3.62 or - 7.26%. At the lows, the price was down over 8% (low reached $45.79.
  • Bitcoin on Coinbase is trading at up $40 at $3532. The digital currency is closing for the 2nd day in a row above it's 200 hour MA at $3326. Buyers are keeping control (at least for now).

In the European and US stock markets, European shares ended the day near lows for the day at the close. In the US, the price action was reflective of the anxiety in the market from trade, and FOMC, and potential government shutdown. The major indices moved up and down and is ending nearer the bottom of the day's trading range.

A snapshot of the yields are showing sharp declines with the 2 year down -4.4 bps. The 10 year is down -3.8 bps. The 2-5 year spread is back to just positive.

In the 10 year benchmark debt issues in Europe, yields were mostly lower (the exception is the UK 10 year). Italian yields were lower by 2.2 bps. After the close it was announced that the EU commission had accepted Italy's 2.04% budget deficit. We will see if that leads to more buying in the higher yielding Italian debt (well 2.938% is not exactly a bargain compared to US yields at 2.8192% from a risk standpoint but it is still much higher than German rates at 0.244%)

The summary snapshot of the forex market shows the NZD remains the strongest currency of the majors. The CAD was the weakest.

For the NZDUSD, the pair got a boost early in the session on Tuesday on the back of better than expected ANZ business confidence. The momentum continued into the London session but did stall right at the Thursday high at 0.6879. By that time, the pair has passed above the 100 hour MA (at 0.6829, the 200 day MA at 0.6835 and the 200 hour MA at 0.68516. In the NY session, the price did correct lower and spent the last 5-6 hours below the 200 hour MA. Stay below will push back toward tests of the 200 day and 100 hour MA levels. A move above the 200 hour MA and the rally can resume.

The CADs rise took it's price to a new 2018 high (at 1.3444), and the pair traded at the highest level since June 2017. The high price extended to 1.3496 (call it 1.3500) before backing of a little into the close. IN the NA session, lower than expected manufacturing sales and the tumbling oil, helped to keep the pair supported (weaken the CAD) vs all the major currencies.

The GBPUSD broke above it's 200 hour MA (currently at 1.2634) for the first time since December 10th (and 5 separate test of that MA). That helped to send the pair up toward the 1.2700 level which was a floor area until breaking hard below on December 10th. The fall from the high took the price back to and through the 200 hour MA again but support at the 100 hour MA at 1.2619 held. That MA level is support and a risk level into the new trading day. So far the buyers are holding the support but no a break below look for the dip buyers to give up and sell. On the topside, the 1.2657 (50% of the December range) and the 1.27000 remain key levels to get above and stay above.

For the USDJPY, the first half of the trading day was spent moving lower. When the price hit the 112.23 level where the price bottomed on December 6th and also on December 10th, traders could not pass up the chance to make it three lows at the same level this month. Buyers leaned and the price moved higher. ON the move the pair's price extended back above the 100 day MA at 112.384. That is now a support/risk level for bulls. On the topside, a move above the 112.657 will be eyed.

Some worrisome news after the close....Micron and FedEx are trading lower. FedEx is a barometer for the general health of the global economy. The rub? This headline..."FedEx Slashes Earnings View, Warns Global Trade Has Slowed" is a theme that may continue to keep a lid on the stocks even if the Fed slows their hike pattern.