Forex news for NY trading on October 22, 2018.
- US stocks end the session with mixed results
- Gold treads water around the 100 day MA
- US WTI crude oil futures settle at $69.17
- Canada's Freeland: US steel tariffs are unjustified and illegal
- China Govt official: China never wants a trade war with anybody
- Trump approval rating higher/disapproval rating lower: Gallop Poll
- A snapshot at midday shows the USD is the strongest. The GBP is the weakest.
- UK PM May: Broad shape of Brexit deal is now clear
- European stocks give up gains. End the session lower.
- UK Times: Conservative rebel Baker set to withdraw amendments that would have made Brexit negotiations difficult
- ECB: Banks expect to see increase in demand for housing and consumer credit
- Di Maio: If European commission should reject Italy's letter, there is still weeks to discuss budget
- Chicago Fed national activity index for September 0.17 versus 0.22 expected
- Canada wholesale trade sales for August -0.1% versus -0.2% expected
- The CAD is the strongest. The GBP is the weakest as NA session begins.
- ForexLive European FX news wrap: Dollar holds steady as pound gets dragged down by domestic political woes
In other markets:
- Spot gold is down -$4.20 or -0.35% at $122.60.
- WTI crude oil futures are trading near unchanged levels at $69.17
In the US and European stocks today, the major indices closed lower with the exception of the Nasdaq (which rose 0.26%). The S&P index fell -0.43% and the Dow fell -0.5% in the mixed US session.
In the government debt market in the US, yields are marginally higher. The longer end was higher at the close (a little steeper), reversing an earlier (albeit modest) flattening trend.
In the benchmark 10 year note sector in Europe today, yields were mostly lower. Below are the ranges and changes for the benchmark yields.
In the forex market in the NA session there was little in the way of economic news.
The Chicago National Activity index (a compilation of a number of releases) declined to 0.17 from a revised 0.27 last month. The expectations was for a reading of 0.22. Although lower, a reading above 0.00 shows an expansionary economy. Of the 85 components in the index, 46 were positive. The index had little reaction.
A bigger contributor was Brexit related news. Toward the start of the NY session the DUP was said to back amendment - tabled by Tory euroskeptics - to make EU's Irish backstop illegal. That helped to send the GBPUSD tumbling from 1.3030 to below the 1.3000 level, and then to a new session low early in the session (low reached 1.2955). The rest of the NY session saw the pair confined in a relative narrow 1.2955 to 1.2985 trading range.
The EURUSD also moved lower in sympathy with the GBPUSDs move. For that pair, the price moved from about 1.3030 to its session low of 1.2955 in the first few hours of trading. There was a move below the 1.1459-63 swing area (see post here) in the late morning session, but the pair ran out of downward momentum and waffled in at 1.1455 to 1.1476 range for the rest of the day. The new trading day is starting with the pair retesting the 1.1459-63 area. That will be a barometer for the bulls and bear in the new trading day.
The USDJPY moved higher in the Asian session on the back of higher China stocks. That momentum took the price to new highs into the NY open at 112.87. The problem? The price ran into some overhead trend line resistance AND stocks in the US started to weaken in the pre-open trading. The rest of the day was spent moving down and up between 112.64 and 112.87 (there was a pip up to 112.881 actually). The day closed near the middle of that range. The topside trend line is at 112.90 into the new day.
In other pairs:
- The NZDUSD fell to test the 200 hour MA and found buyers leaning against that MA.
- The GBPJPY fell toward its 100 day MA (it bounced off the level last Thursday) and 38.2% retracement at 145.825 and 145.956 respectively. The low could only reach 146.03 - well ahead of that key area. The area remains a level to eye on more weakness in the new day.
Below is a snapshot of the strongest and weakest of the major currencies. The CAD nipped out the CHF and the USD as the strongest. The GBP was the weakest.
