Forex news for NY trading on Juen 24, 2019
- US stocks end mixed with the Dow up, broader indices lower.
- Trump-Xi diner will be a watershed for markets
- Iran US ambassador says new sanctions show US has no respect for international law
- Fed's Kaplan: It's 'wise' to take time to consider rate changes
- Oil rebounds to third straight day of gains
- Gold hasn't looked this good in years
- As Pres. Trump and Mnuchin address the press, the lockdown does continue...
- Mnuchin: Sanction on Iran were in the works before drone strike
- Bitcoin moves up to unchanged. Correction is modest after the weekend run up.
- European shares end mostly lower
- Dallas Fed manufacturing activity for June -12.1 versus -2.0 estimates
- Trump tweets that the Fed "doesn't know what it's doing"
- May Chicago Fed national activity index -0.05 vs -0.45 prior
- The AUD is the strongest and the USD is the weakest as the week begins
In other markets, a snapshot of the market is showing:
- Spot gold rose $18.60 or 1.33% at $1418.16. A lower dollar and new highs going back to 2013 helped to keep the run higher in the gold going. The $1433 is the next target (high from 2013).
- WTI crude oil futures rose $0.41 or 0.70% at $57.83. The low reached $56.75. The high extended to $58.22
- Bitcoin on Coinbase is trading down $100 at $10,925. The high reached $11,284.44, while the low extended to $10,550.21.
The US stocks are ending closer to the lows with mixed results. The broader S&P and NASDAQ indices closed lower. The Dow industrial average of 30 stocks eked out a small gain for the day. It closed around 100 points away from its all-time high. The NASDAQ back to back losses for the 1st time in 2 weeks. The European shares also ended the day mostly lower. Below are the high, low and close % changes of the major European and North American indices. The was performing index was the Russell 2000 (-1.26%), the UK FTSE (+0.12%) and Dow (+0.03%) were the only gainers of the major indices today.
The forex market saw the dollar move lower in trading today. It was neck and neck with the JPY as the weakest currency on the day. The AUD started and ended the day as the strongest currency, although it gave a lttle bit of it's gains back toward the end of the day.
Fundamentally, the Chicago Fed National Activity index came in better than the prior month. The bigger surprise was the Dallas Fed manufacturing activity index for June which came in at -12.1 vs -2.0% estimate (lowest level since June 2016). Although much weaker than expectations, the trend for the regional indices (Philly, Empire) has been to the downside as a result of tariff/trade fears. That all can change at the end of the week, when Pres. Trump and China's Xi are scheduled to have an extending meeting at the G20 meeting.
It is that meeting at the end of the week, that has traders attention. One can argue, that success from the Trump administration, would be good for the stimulus side of the economic ledger. However, it might be a negative for the Fed cutting side of the ledger. President Trump over the weekend, and again today, criticized Fed Chair Powell and encouraged him to ease policy further. He also would likely want a lower dollar too. A deal with China might keep the Fed on hold and help strengthen the dollar in the process.
The best case scenario for Pres. Trump is the Fed cutting, a continuation lower in the dollar, followed by euphoria from a China deal sometime down the road.
It'll be an interesting dance but it won't play out until later in the week. In the meantime, and specifically today, the dollar went modestly lower. Rates were also lower and as mentioned gold soared.
In times of uncertainty, the price action and tools applied to the price action will help fill in the details of the story. Below are technical stories for some of the major pairs.
EURUSD:
The EURUSD trades in an upward channel on the hourly chart. When in an upward channel, it requires the price to continue the trend higher as each hour ticks by. We currently are in the middle of the channel with 1.14312 as the upper target and 1.1360 as the lower target (each are moving higher). The pair trades at 1.1398 near the close. The EURUSD moved above the 200 day and 200 week MAs last Friday at 1.13495 and 1.13444 respectively. It will take a move below the lower trend line and those two MAs to turn the tide more to the downside for the pair.
GBPUSD
The GBPUSD moved higher earlier in the day but ran into resistance at the 1.2758-71 swing area. The area is home to the low from Feb 2019, and highs from earlier this month. The today stalled between the extremes and backed off. On the downside, watch the 1.2727 level. A move below could solicit more sellling.
USDJPY
The USDJPY chopped up and down in trading today, but is ending near the lows for the day at 107.24-27. A move below in the new day will have traders eyeing the Friday low at 107.04.
AUDUSD
The AUDUSD squeezed higher but stalled near a topside trend line (at 0.6972 currently). ON the downside, a lower trend line cuts across at 0.6935. The 100 bar MA on the 4 hour is at 0.69335 and the 200 bar MA on the 4-hour is at 0.6928. Move below each of those levels, will weaken the AUDUSD technically.
