Forex news for FX traders on January 21, 2019
- Major indices end the up and down in the red.
- CFTC commitments of traders: EUR and JPY shorts trimmed
- WTI crude oil futures settle at $57.43
- White House trade advisor Navarro: Either we get a great deal with China, or we don't
- USD/CHF shorts were the best FX trade this week
- Baker Hughes US oil rig count 789 vs 788 prior
- Bitcoin eyes $10K. Above the 38.2% of the move down from the all-time high
- Fed's Brainard: Risk management argues for softening expect rate path
- Is this really the 'moment of truth' for the US dollar?
- European shares end the day mixed
- The NY Fed GDP Nowcast remains at 1.4% in the current week
- US VP Pence to postpone China policy address indefinitely
- Fed's Kashkari says he called for 50 bps cut at FOMC meeting
- US May existing home sales 5.34m vs 5.30m expected
- Markit prelim services PMI 50.7 vs 51.0 expected
- Trump says he stopped attack on Iran because it would not have been proportional
- US gasoline prices jump 3.5% after massive fire at Philadelphia refinery
- Canada May retail sales +0.1% vs +0.2% expected
- The EUR is the strongest while the NZD is the weakest as NA traders enter
A snapshot of other markets near the end of the trading week are showing:
- spot gold plus $10.57 or 0.76% at $1399. The price moved to a high of $1412.08. The low extended to $1382.33. Last week gold closed at $1341. The run higher was helped this week by lower rates on the back on expectations of the Fed cutting rates in July.
- WTI crude oil futures are ending the week trading at $57.61. That is up $.54 or 0.95%. The contract settled at $57.43 which was up 10% on the week. The sharp gains were held by tensions in the Middle East with Iran
- Bitcoin on Coinbase is heading into begin trading near the $10,000 level. The digital currency is trading up $331 at $9892. THe high price today reached $9950 while the low extended to $9460.97. A week ago, the digital currency closed at $8697. That is a gain of 13.7% on the week.
In the forex market today, the EUR was the strongest of the major currencies, while the CAD was the weakest. The USD was weaker thanks to declines vs the EUR, CHF and GBP. The USDJPY, AUDUSD and NZDUSD were near unchanged on the day. The USDCAD moved higher.
The EURUSD trended higher today. The PMI data was better for Germany and France, plus a good old fashion Friday technical squeeze sent the EURUSD to the highest level since March 22, 2019 (there is still residual dollar selling flows from the FOMC that are still around).
In the process of the move higher, the price moved above a cluster of key resistance defined by the 200 week moving average at 1.1343, swing highs for June at 1.1343 and 1.1346, and finally the 200 day MA at 1.13506. That break of the key area, helped to push the pair to a high price of 1.1377 (the price is trading about 10 pips off the highs near the close of day). Making the level so important is that the price of the EURUSD had not traded above 200 day moving average since May 2018 - 13 months ago. That is significant and next week traders will be looking for that area (1.1343-51) to maintain support. For the day, the pair had a near 100 day trading range and is up about 75 pips on the day.
The GBPUSD was less impressive than the EURUSD. However after being down in the London morning session, the pair bottomed near the start of the NY session at the 38.2% of the move up this week at 1.26414 and the 200 hour MA at 1.26452 (the low traded at 1.26417). Holding those two key levels, turned sellers into buyers. Getting in the black for the day at 1.2701 (and above the 1.2700 level), and then moving above the 1.2727 level (there is something about that level as it has been home to a number of swing levels in June), sent the pair to new session highs - and the highest level since June 12 - at 1.2746 (closing at 1.2740). The June highs at 1.2757 and 1.27624 will be targeting next week, with traders keeping an eye at the 1.2727 below as a close barometer for bullish and bearish sentiment (stay above is bullish/move below is bearish). In the UK this week, the ballot vote participants were decided for PM with Boris Johnson and Jeremy Hunt the last two standing.
The USDJPY last week, traded in a 65 pip trading range. Until the FOMC decision at 2 PM on Wednesday the range was 67 pips. Something had to give and it did after the Fed decision. The price extended the range from 67 pips to 167 pips by the time the low was reached today at 107.043. That low stalled at a lower trend line on the hourly and rebounded toward the 38.2% retracement of the week's trading range at 107.682 (the high reached 107.73) Bear are in control for the pair below the 38.2% retracement level and given the break lower this week.
The USD was stronger vs the loonie today. The pair had been hit hard on the back of higher oil and higher CPI inflation this week. The low bottomed on Thurday at 1.31504. Today, the pair just seemed to have a covering bid into the weekend. The low was above the low from Thursday at 1.3161. The high extended to 1.32287. The close is around 1.3220. Although off the lows, the pair remains below the 38.2% retracement of the move down from the week's high at 1.32578 and the 200 day MA up at 1.3277. Next week, if the price moves up to test those levels next week, traders should lean against with stops above the level.
Today, US stocks ended lower on the day. For the week, the S&P index did close at a new record high on Thursday, but could not keep that momentum today (despite making new intraday highs). The Dow also moved above the highest close intraday, but gave up gains into the close. Below are the % changes of the major indices in North America and Europe today.
The US yields today saw the 2 year down -1 bps and 30 year +4.5 bps.
The 10 year yield ended last week at 2.084%. The low fell to 1.9719% on Thurday before rebounding higher. At -3 bps on the week is result given the Wednesday/Thursday levels. For the 2 year, the week ago close was at 1.8405%. Today the 1.7678% close shows more yield weakness. That is still off the Thursday low at 1.6937%.
That's it from me. Have a great weekend and thank you for your support.
