Forex news for NY trading on August 20, 2019
- US stock indices go out near the lows for the day
- Oil - heads up for the (private survey) inventory data, due around the bottom of the hour
- Morgan Stanley on why the risk rally will fade
- Italy's President confirms Conte has resigned
- Trump says he would love to reduce capital gains taxes
- Trump: Administration is looking at possible tax cuts
- BOE may delay BOE Governor decision until after Brexit
- European shares give up gains and move lower
- Fresh talk of EU concessions on Irish border backstop
- New Zealand GDT price index -0.2%
- Italy PM Conte: Salvini's moves show little sense of state
- Italy PM Conte: August political crisis paves the way for autumn vote
- Johnson: Until the agreement is reopened and backstop abolished, there is no chance of a deal
- Philadelphia Fed non manufacturing general business activity 7.5 versus 21.4 last month
- Canada July Teranet house price index +0.4% vs +0.5% y/y prior
- Canada June manufacturing sales -1.2% vs -1.8% m/m expected
- The JPY is the strongest and the GBP is the weakest as NA traders enter for the day
In other markets:
- Spot gold is up $11.76 or 0.79% at $1507.60
- WTI crude is up $0.13 or 0.23% at $56.34
The USD eased in the NY session and risk appetite soured. The dollar was the weakest of the major currencies today. The CHF and the JPY are ending as the strongest on flight to safety flows.
Some catalysts:
- Secretary of State Pompeo said that Huawei isn't the only company that poses risk.
- Pres. Trump said he is not ready to do a deal with China and implied that he is not concerned about a US recession in the short term, if it means having a better trading deal with China.
- Chatter in the UK/EU that implied perhaps some compromise on the Irish Border puzzle. Nothing is a guarantee but the news sent the GBP pairs higher, and in the process dragged higher the EURUSD as well.
- US yields have moved back lower after some upward moves over the last few days. Looking at the chart below, the changes along the yield curve are -3.5 to -5.4 bps
- Equities in both the US and Europe ended near low levels for the day. In the US, the S&P fell -0.79% and the Nasdaq fell -0.68%. Both closed at the day's lows.
- Gold rose which helped to weaken the greenback as well.
Some technical levels to eye in the new day:
- EURUSD. The price of the EURUSD moved back higher to test the 1.1100 to 1.11115 resistance area. Stay below is more bearish. Move above and we could see more dollar selling vs the EUR (i.e. more upside for the pair).
- GBPUSD. The GBPUSD tested its resistance area defined by swing highs in the 1.21749 to 1.21901 area....twice. Each time, sellers leaned and kept the price below the level. That is resistance that needs to be broken and stay broken for the bulls. On the downside, after the run higher on the Irish border headlines, the correction lower stalled at the 100 hour MA (currently at 1.21178 and rising). That rising MA is now support.
- USDJPY. Selling in the last hours of trading in the USDJPY, has pushed the price below its 100 hour MA at 106.274. Stay below is more bearish.
- USDCHF. Like the USDCHF, late day selling took the price below its 100 hour MA at 0.9780 (trades at 0.9772). Stay below is more bearish for the pair.
- USDCAD. The USDCAD stalled the corrective fall after rising strongly yesterday, against the 200 day MA and the 100 hour MA at 1.33048 (both are at the level currently). That level will be a barometer for the bulls and bears in the new day. Move below and there could be more downside corrective action. Stay above and the pair may make another run toward the recent highs in the 1.3338 to 1.3345 area.
....more
