Forex news for NY trading on September 19, 2019
- US stocks close with mixed results. Earlier gains taken away.
- US WTI crude oil futures settle at $58.13
- US agricultural secretary: Chinese delegation will visit US farms next week
- Be aware...newswires picking up on China tariff threats
- EU Juncker: We can have a deal. Brexit will happen.
- Trump ready to escalate trade war if no deal, advisor says
- European shares are ending the session higher on the day
- US August existing home sales 5.49m vs 5.38m expected
- Credit Suisse will charge rich clients for Swiss franc deposits
- South African reserve bank leaves rates unchanged at 6.5%
- Fed's overnight repo was oversubscribed again
- Canada August ADP employment +49.3K vs +73.7K prior (revised to 30.2K)
- Philadelphia Fed business outlook Index for September 12.0 versus 10.5 estimate
- Canada August Teranet house price index +0.6% y/y vs +0.4% prior
- US weekly initial jobless claims 208K versus 213K estimate
- US Q2 current account balance -$128.2B vs -$127.4B expected
- The CHF is the strongest and the AUD is the weakest as NA traders enter for the day
- Wilbur Ross: China trade is more complicated than just soybeans
A snapshot of other markets near the close of the day are showing:
- Spot gol, up $4.68 or 0.31% at $1498.65. The New York session saw the price of trade above and below the $1500 level. The high for the day reached $1504.60. The low for the day extended to $1488.90
- The October WTI crude oil contract is trading up $0.51 or 0.8% at $58.62. That is up from the settlement price which was down near unchanged on the day. The low for the day reached $58.01. The high extended to $59.54
The GBP is ending the day as the second strongest currency of the majors (the first was the CHF). That was not the case at the start of the New York trading day.
In fact the pound was down vs the most of the major currencies with only gains vs the AUD (+0.41%) and the NZD (+0.09%) at the start of the NY session.
However, in the early NY afternoon session, European commissioner Jean-Claude Juncker in an interview with Sky News, said that "We can have a deal on Brexit" and that he would do everything to get a deal as no-deal would have catastrophic consequences.
Those comments helped to push the GBP sharply higher. The GBPUSD moved to a new session and two month high of 1.25594. It also sent a pair away from its 100 day moving average currently at 1.2492. The pair moved down over the last few hours of trading. Nevertheless, the pair will be closing above is 100 day moving average for the first time since September 9.
Whether that break holds up over time willl be up to "the market" However, traders cannot ignore the break and close from a technical perspective. Should the bias remain bullish, the pair targets 1.2580, a trendline at 1.2630 and the 50% retracement of the move down from the March 2019 hi. That comes in at 1.2668
Another influence came from a White House advisor who said that Pres. Trump is ready to escalate a trade war with China if no deal is imminent. That would include raising tariffs on China goods to 50% to 100%. The news weakened the US stocks. By the end of day, the major indices had eroded most of their gains from earlier in the session.
Other fundamental news for the day included:
- initial jobless claims remained strong at 208K versus 213K estimate. The four-week moving average remains near lower levels
- Philly Fed business outlook index came in better than expectations but lower than the previous month. Inflation measures were higher. Employment, shipments unfilled orders inventories and average workweek also were higher in the month.
- US existing home sales were better-than-expected at 5.49 million annualized pace. That beat the 5.38 million estimate. It was also higher than last months 5.42 million level. Lower mortgage rates and a solid economy are breathing life into the home buying market. Yesterday building permits and housing starts were also stronger than expectations
As mentioned above, the Swiss franc is ending the session as the strongest currency. All/most of the gains occurred in the European morning session. The Swiss National Bank separates unchanged which is something new for central banks lately. After bottoming near its 100 day moving average of 0.9903. The pair corrected as high as 0.9941 in the New York session and is closing between its 100 hour moving average of 0.99285 and 200 hour moving average of 0.99203.
The USDJPY also fell on the day (JPY higher). The Bank of Japan also Rates unchanged. The fall in the USDJPY did test it's 200 hour moving average on two separate occasions. Each dip found buyers. The 200 hour moving average and 100 day moving average currently converge at 107.89. Although support buyers were found, they could not muster enough buying momentum to take the price back above its 100 hour moving average at 108.068. In the new trading day, traders will be watching those two levels (108.068 on the top side and 107.89 on the bottom side) for the next bias break.
The EURUSD opened the New York session near highs from Tuesday and Wednesday at the 1.1072 to 1.1075 area. The price momentum higher could not break above that ceiling, however, and the price fell back toward its 100 and 200 hour moving averages currently at 1.1042-44 area. The pair is closing just below those levels at 1.1040. In the new trading day, staying below will be more bearish, while moving above should solicit more buying.
TGIF to our Asia-Pacific friends. Wishing you all a happy and healthy weekend.
