Forex news for NY trading on September 22, 2020.
- NASDAQ leads the way to the upside. S&P and NASDAQ break 4-day losing streak
- Boris Johnson: Suggesting we should lock up the elderly is not realistic
- Crude oil futures settle at $39.80
- UK: 70% of trucks may not be ready for Brexit border checks
- White House McEnany: Onus is on Nancy Pelosi for next relief bill
- France's Macron: US maximum pressure campaign has so far failed to prevent Iran
- US sells 2-year notes at 0.136% vs 0.134% WI
- Fed's Barkin: Spending is coming back faster than employment
- Mnuchin says China on track to fulfill agricultural purchase pledge
- Fed's Powell: The US economy has proved resilient
- European shares end the session with mixed results
- UK reports 4926 new COVID cases vs 4368 yesterday
- Fed's Evans: US has been able to return to about 90% of precrisis economy
- Eurozone Sept advance consumer confidence -13.9 vs -14.7 expected
- US August existing home sales 6.00m vs 6.00m expected
- Richmond Fed manufacturing index for September 21 vs. 12 estimate
- Biden trade adviser says he would use tariffs if elected
- Philly Fed September non-manufacturing index +8.0 vs +1.6 prior
- The JPY is the strongest and the EUR is the weakest as NA traders enter for the day
- UK PM Johnson: We have reached a perilous turning point on the coronavirus
A summary of other markets shows:
- Spot gold continued its moved to the downside as the dollar rose. The price is trading down around $10 or -0.53% at $1902.46. The high price reached $1920.05. The low price extended to $1894.72.
- Spot silver is also lower. It is trading down $0.25 or -1.04% at $24.45. It's high price reached $25.23. The low price extended to $23.83 before rebounding
- WTI crude oil futures are trading at $39.77 or plus $0.23 or 0.58% for November delivery. The low price for November extended to $39.19. It's high price reached $40.27.The October contract settled and close its trading at $39.60
The US dollar moved higher in trading today and although it came off the highs into the close, most of the gains were maintained. Although higher, the greenback was beat out by the CAD as the strongest of the majors, but not by much. The AUD and the GBP were the weakest of the majors today.
Helping the greenback today were comments from Fed's Powell. While testifying on Capitol Hill, the Fed chairs said that the US economy was proving to be resilient. Chicago Fed's Evans also commented on the economies resilient saying that he was surprised that the "US economy has been able to return to about 90% of pre-crisis economy".
The expectations from the Fed officials is also that rates will stay low for an extended period time (number of years) as inflation continues to fight its way toward the 2% level. Each Fed official also urged Congress to support more fiscal stimulus.
The combination of a more resilient economy, low inflation, low rates and urge for fiscal stimulus proved to be beneficial to the greenback. In a shift from what has been more the norm, the US stocks also moved higher. The shift may be due to increased fear of a bigger 2nd wave of Covid in the UK and Europe. Also concerns about Brexit has the GBP under pressure.
In the US stock market today, the major indices closed higher with the NASDAQ index outperforming. The NASDAQ and S&P index snapped 4 day losing streaks. The NASDAQ still remains some 9% off of its all-time high, but it did close above its 50 hour moving average at 10943.315. The 50 day moving average remains a hurdle above at 11010.69 (maybe tomorrow?)
The S&P index is 8 percent of its all-time high level. It's price remains around 30 points below its 50 hour moving average at 3347.63 and its 50 day moving average up at 3348.04.
A look at the major indices shows:
- The NASDAQ index closed up 184.83 points or 1.71%
- The S&P index closed up 34.51 points or +1.05%
- The Dow industrial average closed up 140.48 points or 0.52%
A technical look at some of the major currency pairs shows:
- GBPUSD. The GBPUSD traded above and below the near converged 100 and 200 day MAs at 1.2720. The pair moved to a low of 1.2709 but rebounded into the close and trades at 1.2732. Those MAs will be barometers for the buyers and sellers going forward
- EURUSD: THe EURUSD traded to a low at 1.1690. That was just below the August 1 low at 1.1694 but just above the 38.2% of the move up from the June 19 low at 1.16884. The price moved up to 1.17104 toward the close but the 1.1688-95 area remains a key area going forward. The weekly speculative position report from the CFTC continues to show oversized longs in the EUR/shorts in the USD. If the pair continues to move lower, it could see an added squeeze.
- USDJPY moves above the 100 hour MA with momentum at 104.64. The price also moved above the 38.2% retacement at 104.905 (from September 8 high). The best case for the correction higher to continue is for the 38.2% to hold support. If it can, the 200 hour MA at 105.20 would be the next upside target. If it can't hold support, a retest of the 100 hour MA at 104.64 may be in the cards.
- AUDUSD: The AUDUSD traded to a new low for September (below 0.71917 - now close risk for sellers - stay below is more bearish). The fall today also moved further away from a broken upward sloping trend line. If the price can stay below the 0.71917, the next targets would look toward the August lows at 0.7135, 0.71083, and 0.70758. Below that and traders will be looking toward the rising 100 hour MA at 0.6989.
