Forex news for near trading on January 2, 2020.
- Day one of 2020 and record closes for the major indices, and at session highs too.
- January forex seasonal patterns leave some question marks
- Crude oil futures settle at $61.18
- Bitcoin off to a weak start in 2020
- FOMC meeting minutes to be released tomorrow
- European shares end the 1st day of the year with solid gains
- US treasury announces auctions for next week
- A China-Taiwan flareup is a black swan risk in 2020
- US December final Markit manufacturing PMI 52.4 vs 52.5 expected
- December Canada Markit PMI 50.4 vs 51.4 prior
- Gold starts the year strong in rally to three-month high
- US weekly initial jobless claims 222K vs 220K expected
- All about the flows to start the year with little on the US economic calendar
- The USD is the strongest and the NZD is the weakest as the NA session begins
In other markets,
- WTI crude oil futures are trading up $0.06 or +0.10% the $61.12. The high extended up $61.60. The low reached $60.64. The contract is trading near the middle of the trading range
We are one day into the New Year, and being true to 2019, we are making new record highs for the three major indices. The People's Bank of China's lowering of the reserve requirement got shares off to a roaring start. There was a little downside blip in the New York morning session when investors got a little concerned about geopolitical risks (i.e., North Korea and Iran specifically), but those fears have proved in the past to be short-lived. Today, the blip lower was only for an hour or two at most.
Granted the trading desk might still be short handed, but stock investors are happy with the gains in 2019, and want more in 2020
The NASDAQ index is leading the way with a gain of 1.33%. European shares also rose smartly today with gains close to or above 1% (Spain's Ibex led the charge at up 1.49%).
While stocks moved higher, yields in the US close lower with the yield curve flattening. The 2 year yield flat all the 30 year yield fell by 5.8 basis points. The debt markets seem to be more concerned about the geopolitical risks than the equities.
That geopolitical fear was evident in the gold market as well. Gold prices are trading up $11.30 or 0.74% at $1528.59. That is just off the high price of $1531.40. The low price for gold was down at $1517.29.
In the forex market today, the JPY and USD saw investor flows. The JPY was impacted by risk aversion. However, some of the earlier gains in the JPY pairs, were pared by the close as geopolitical fears subsided. For the USD, you might argue that global investors in gold, US treasuries (lower yields) and stocks may have in a catalyst for the greenbacks gains.
The biggest loser on the day was the GBP. It fell against all the major currencies with the largest decline versus the JPY (-1.06%).
Below is the ranking of the major currencies along with the percentage changes of each of the major currencies pairs and crosses.
Some technical levels for the major currency pairs to watch into the new trading day:
- EURUSD: The EURUSD it is closing the day below its 100 hour moving average at 1.1183. The current price trade at 1.1172. Stay below the 100 hour moving average would keep the tilt more in the bearish direction. On the downside the 50% retracement of the move up from the December 20 low comes in at 1.11522. A little lower is the 200 day moving average at 1.11404 and the 200 hour moving average at 1.1138 (and moving higher).
- GBPUSD:The GBPUSD fell down and in the process tested its rising 100 hour moving average and sideways 100 bar moving average on the 4 hour chart near the lows. The low for the day reached 1.3115. The 100 bar moving averages are currently at 1.3128. The price is trading at 1.3139 so with the price above, the dip buyers are hoping the moving average support can hold.
- USDJPY: The USDJPY tumbled in early New York trading falling below the low price from New Year's Eve at 108.46 and did not stop until it reached a low of 108.206. When the US stocks started to stabilize buyers reentered and push the price back up toward the midpoint of the days trading at the 108.532. That is where the price is trading as traders look to exit for the day. Close support will be the New Year's Eve low at 108.46. On the topside watch the 200 day moving average at 108.661. A move back above that level would not be good for the sellers.
- AUDUSD: The AUDUSD found support against its 100 hour moving average in the London morning session, but cracked below that level in the New York session. The moving average comes in at 0.6989. The current price is just below that level 0.69877 after selling stalled at 0.6972. Traders will be watching that 100 hour moving average for bias clues. Move above and the bias will tilt more to the buyers/bulls. Stay below and the look for more selling with the rising 200 hour moving average at 0.6950 as a target to the downside in the new trading day
Wishing you all good fortune in your trading