Forex news for NY traders on December 19, 2017.
- No records in the US stock market today. Major indices lower.
- Bitcoin dips below 200 hour MA (Coinbase)
- US 10 year yield up about 7 basis points
- People are freaking out about aliens... seriously
- US House has enough votes for passage
- Forex technical analysis: EURUSD racing to new session highs.
- Trump and May agree on the importance of a swift post-Brexit trade deal
- Commodity currencies slide to the worst levels of the day - USD/CAD threatens break
- European stock markets sag at the close
- China 2018 blueprint puts focus on growth, not debt - WSJ report
- Forex technical analysis: EURUSD staying above the 100 day MA
- Crypto mania: Longfin CEO says market cap isn't justified and the market doesn't even care
- US 10-year yields look like they could finally be breaking out
- Bitcoin technical analysis: Bitcoin tests key 200 hour MA (on respective exchanges)
- Senate to vote on tax bill this evening: McConnell
- SEC suspends shares of The Crypto Company
- AUD/USD struggles ahead of the 200-day moving average
- Atlanta Fed GDPNow 4Q forecast unchanged at 3.3%
- Fonterra New Zealand GDT auction -3.9%
- US current account for the 3Q -100.6B vs. -$116.2B
- US housing starts for November 1297K vs. 1250K est.
- The EUR is the strongest. The GBP is the weakest as NA traders enter
- ForexLive European FX news wrap: Cable goes up, down, and all around in quiet trading session
In other markets:
- Spot gold is near unchanged levels at $1262.
- WTI crude oil futures are up $0.30 or 0.52% at $57.46
- US yields rose on the back of better data and confidence the US tax reform will spur on more growth/inflation. 2 year 1.8484%, up 2 bp. 5 year 2.216%, up 4.9 bp. 10 year 2.4554%, up 6.1 bp. 30 year 2.812%, up 7.1 bp
- The US stocks are ending the session with declines. The NASDAQ index was the big loser. It fell -0.44%. The S&P fell -0.32%. The Dow fell -0.15%
The US tax reform bill passed in the House of Representative, but when it went to the Senate late in the NY session, there were some procedural violations in the version it already passed. As a result, they will have to re-vote on it on Wednesday. The bill passed by a vote of 227-203. The Senate will go ahead with their debate and vote probable later today (or early in morning). Although the vote is supposed to squeak by with a vote or two to spare, it is expected to pass. Once finished, it will go to the President who will sign it into law - most likely by the end of the week.
The imminent passing of the tax reform did not have the follow-up euphoria that we saw yesterday in the US stock market. The major indices were all lower with the Nasdaq and the high flyers of 2017, leading the way to the downside. The Dow -which was up 8 of 9 days before today - and the S&P were also lower. No closing records for the major indices today.
Yields in the US, were sharply higher. I think it was a combination of confidence that the tax reform will spur on growth and investment, along with some pretty good US housing starts and building permits data (both were above expectations and near high levels). 10 year yields moved to a high of 2.4698%, just shy of the 2.4736% high from October (see post here). The high yield for 2016 (from March) at 2.627% and the high yield from December 2016 at 2.6394%, would be the next targets should the October high give way (technically). A move higher, might also need some help from European yields. Today, the German 10 year was up 7 bps, France was up 7.5 bp and Italy was up 11 bps. So at least there was a parallel push higher.
In the wonderful world of bitcoin today, the price fell below the 100 hour MA (blue line in the Bitstamp bitcoin chart below), but stalled at the 200 hour MA (green line). The price waffled between support and resistance before the 200 hour MA gave way today. The fall below the 200 hour MA is the first break (and close) since November 15th. Stay below the 200 hour MA keeps the sellers in control.
What about the forex market today (this is Forexlive after all)...honestly, the markets seem to be on auto-pilot as the day's tick into the new year. Yes, there are moves - the EUR was the bullish today as it moved back above the 100 day MA at 1.1800 and moved above a topside trend line that cut across at 1.1833 now, but the price remains below the spike high from last week at 1.1862. Also what has gone up has tended to come back down lately. So into the new day what the 1.1833 for close support. A move below will still need to see are move back below the 1.1800 level to turn the bias more bearish, but it WILL raise a skeptical eyebrow from the buyers who want to see a race higher. Nevertheless, until then, the buyers have more control.
The USDJPY followed the yields higher and ignored the stocks. It based in the Asian session on the 100 bar MA on the 4-hour chart, moved above the 100 hour MA, the 200 bar MA on the 4-hour (at 112.746) and the 200 hour MA at 112.977. The high extended to 113.072 before rotating lower into the NY session close at 112.867. That was just below the 50% retracement of the move down from the December high. I like to think of the 50% as a barometer for bullish an bearish. We are trading right around that level.
Another neutral level in my book on technical analysis, is when the 100 and 200 hour MAs converge and the price trades around that level. I call it "Three's a Crowd". The GBPUSD has the 100 hour MA at 1.33877, the 200 hour MA at 1.33854 and the price at 1.3385. So all three are crowding around each other. Typically, the "market" likes to move away from such a dynamic. So in the new trading day, look for more of a break and run. Keep that dynamic in your trading mind should you want to get involved.
Below is the near close table of strong and weak today. The EUR wins as the strongest currency. The JPY is the weakest. The USD ends the day with gaiins against the JPY and declines vs the EUR. The rest of the pairs were a little higher and a little lower vs the close from Monday.
Good fortune with your trading. Have a good day/night depending on where you are in the world.