Forex news for NY trading on July 20, 2020.
- NASDAQ index rises over 2.50% on the day. New record close
- US virus cases rise 1.3%.
- Pelosi, Schumer, Meadows, Mnuchin to meet on Tuesday
- California Gov. Newsom: Hospitalizations are rising at a slower pace
- WTI crude oil futures settle at $40.81
- California reports 6846 cases vs. 14 day average of 8370
- US CDC reports 63,201 new cases vs 67,574
- EU proposes €750 billion pandemic stimulus fund
- New Jersey governor: Schools will open in the fall
- Houston area virus ICU census plunges 18% to 2 week low of 811
- Rep. McCarthy: Says stimulus includes payroll tax cut and direct payments
- BOE Haldane: We are reviewing negative rates
- European shares end higher on hopes for a EU recovery compromise
- Pres. Trump: Coronavirus is a worldwide problem. To lead coronavirus briefings starting tomorrow
- Arizona coronavirus statistics show 1559 new virus cases vs. 2359 yesterday
- Chicago to retightened some of restrictions for bars and restaurants
- Mnuchin: Starting with another trillion dollars in next stimulus
- More from the BOEs Haldane/Tenreyro
- Bank of England Haldane: Main challenge of the next 3 years is Covid implications
- Florida coronavirus new cases up 10,347 vs. 12,523 yesterday
- Oxford vaccine shows good antibody,T-cell response
- Italy's Conte: Cautiously optimistic of accord at EU Summit
- Teranet/National Bank HPI rise 0.7% vs 1.1% last month
- The GBP is the strongest and the JPY is the weakest as NA traders enter for the day
In other markets:
- Spot gold is trading up $7.59 or 0.42% at $1818. The high price reached $1820.53. That was the highest price since September 2011
- WTI crude oil futures for September delivery is trading at $40.79. That's up $0.04 or 0.10%. The high price reached $41.02. The low price extended to $39.97. Increase risk demand after AstraZeneca trials showed favorable results helped to push the price of crude oil back higher.
The US stock market was led by the NASDAQ index today. It rose over 2.5% on the day and closed at a new all-time record record. The index is closed up and even 20% on the year. The S&P index also closed above the closing level for 2019 for the 2nd consecutive day. It is now of 0.65% on the year. The stocks were mixed near the opening for the day, but got a boost after the Oxford/AstraZeneca vaccine showed good antibodies, T-Cell response. In addition, key analysts raised Amazon's target stock price target to $3800 a share. Amazon shares rose by $234 or 7.93% to $3196.84. Shares of Tesla also advanced strongly ahead of their earnings on Wednesday. Tesla shares rose $142.16 or 9.47% to $1643. Microsoft – another high flyer in 2020 – rose 4.3%. The earnings calendar gets a little bit more serious this week with Tesla, Microsoft, Intel, American Express all scheduled to report. Next week Amazon will release their earnings.
In Europe the EU recovery fund meeting extended to their 4th day (the meeting was post and after 2 days) and have made progress toward a massive €1.5 trillion budget and coronavirus recovery fund. Initially, Germany and France were looking for €500 billion of grants. The Northern country with strict controls on spending well the struggling southern Mediterranean countries said that conditions should be kept to a minimum. Ultimately a new compromised $390 billion of grants has been proposed. The compromise agreement still needs to be voted on with all the member states agreeing.
In the forex market today, the flow funds and technicals pushed the GBP higher. It was the strongest of the major currencies. The JPY was the weakest of the majors. The USD was lower but apart from weakening by 0.71% vs. the GBP and 0.31% vs the CAD, the other declines were relatively modest. The greenback rose 0.26% vs. the Yen and was unchanged vs. the CHF.
Technically, the GBPUSD had an oversize range of about 150 pips on the day and moved up to retest the earlier July highs (from July 9, July 10, and July 13) between 1.2663 at 1.2668. The high price for the day reached 1.26647. In the new trading day getting above the 1.2668 level and staying above that level will be key for the buyers/bulls. Hold below the level and we could see a rotation back toward the high from last Thursday at 1.2624.
The rise in the GBPUSD was helped by the falling EURGBP. It took out Friday's high at 0.9134 but could only extend to 0.91371 before a move to the downside ensued. The price fell all the way down toward the 200 hour moving average at 0.9032 currently and found support buyers against that moving average level. Like the GBPUSD which is testing a key upside resistance level, the EURGBP is testing a key downside support level which will help determine the bullish and bearish bias going forward. Move below the 0.9032 level and the sellers are more in control. Stay above, and there could be a rebound to the upside.
The USDCAD fell away from the 100 and 200 hour moving averages in the North American session today up at 1.35668 area. The move to the downside got close to a key swing area between 1.3518 and 1.35235. The low price reached 1.3525, before bouncing modestly into the close. In the new trading day if the sellers are to take more control getting below the 1.35185 is the key 1st step. The next step would involve trading below and through the 200 day moving average at 1.35112. Last week and the week before, traders took the price below that 200 day moving average but could not sustain momentum. As a result the remains a key hurdle to get to and through if the sellers are to squeeze the buyers.
