Forex news for US trading on July 18, 2016.

  • #NeverTrump minority report option expires
  • US crude oil futures settle at $45.24/BBL
  • Forex markets aren't now out of line with fundamentals - US Treasury official
  • Christine Lagarde: Market reaction to Turkey has been relatively moderate
  • Republican National Convention underway: Watch it live
  • USDJPY making new session highs....
  • Bonds, we're going to need more bonds
  • Paul Romer named World Bank chief economist
  • Lagarde talks banking relationships
  • Fiat Chrysler faces securities fraud investigation from US Dept of Justice
  • IMF's Lagarde to speak at New York Fed
  • European equity close: A bit of everything
  • Forex technical analysis: EURUSD enters resistance area. Key test for bears/bulls
  • Turkey cleans out Finance Ministry as it continues to crack down
  • Saudi Arabia May oil exports at 7.3 mbpd vs 7.44mbpd in April
  • New Zealand dollar holding steady despite soft CPI
  • ECB will lower the threshold for bond purchases - RBC
  • NAHB July US housing market index 59 vs 60 expected
  • ECB QE count: Bought €16.31bn vs €16.10prior in QE
  • Bonds more lively than stocks today
  • Oil slides. No sign of a halt in Turkish shipments
  • Turkey bans public employees from foreign travel; parliament evacuated
  • Canada May int'l securities transaction $14.73B vs $15.52B prior
  • Housing and the Republican National Convention on the calendar

The failure of the Turkey coup, expectations for more stimulus out of Japan, a higher US stock market helped to weaken the JPY and make it the highlight currency of the day. It fell against all the major pairs today - falling the most against the GBP, but the currency was down over 1.2% for all the major pairs.

Fundamentally in the NA session there was little to go on. The NAHB housing market index was lower than expectations at 59 vs 60 but that is not a market mover. The news services were rattling the Turkey conflict repercussions but markets like the stock market just yawned and pushed to another record close for both the S&P and the Dow. Earnings season will start to kick-in this week. So we will see if the equity market can trade on something other than things like dividend yields are on par with bond yields.

The USDJPY on Friday stalled but closed near the 200 hour MA after the Turkey coup headlines near the close of the day. Those fears disappeared and today traded mostly above the 50% of the move down from the last significant high from May 30th to the post-Brexit low. That level comes in at 105.23. The low for the day came in at 105.26. On the topside in the new trading day, watch the 106.23-43. A move above that level would be more bullish technically for the pair (see post here).

For the EURUSD, the NY session saw the pair extend what was a thirty-something pip trading range to 47 pips, but the rally stalled against in a key resistance area for this pair this week. That comes in the 1.1071 to 1.1093. Watch this level in the new day of trading.

The GBPUSD is another pair that went no where. Looking at the hourly chart there is lots of green and red bars - signalling up bars and down bars. If the color combination is evenly split, it says that the market is as divided as the RNC convention in Cleveland.

The USDCAD did a lap in trading today. The early North American move was higher. The action was helped by lower oil prices which fell below $45. After moving above technical resistance at the 200 hour MA at 1.2993 and the 50% retracement at 1.2999, the momentum faded, and a move back below these levels, started the selling. A modest oil price recovery helped make selling easier. The USDCAD has had it's share of up and down activity which becomes contagious. Traders simply do not trust the moves and the slightest failure leads to a reversal.

The minute of the last RBA meeting will be released in the new trading day (at 9:30 PM ET/0130 GMT). For the AUDUSD it traded the day above the 200 hour MA (at 0.7574) but below the 100 hour MA at 0.7613. Those levels define the bullish and bearish extreme in the new trading. A break of either should solicit sellers/buyers on the break.

Below is a summary of the % changes for each major currency vs. each other.