Forexlive America's FX news wrap: Not a good day for coronavirus statistics

Author: Greg Michalowski | Category: News

Forex news for NA trading on June 24, 2020

Markets:

  • Spot gold is trading trading down -$4.17 or -0.24% at $1764.24. The high for the day reached a new high going back to 2012 at $1779.53. The low extended to $1760.67
  • WTI crude oil tumbled $-2.28 or -5.65% to $38.09. Coronavirus concerns and another increase in crude oil inventories helped to depress the price.
The fundamental story today was back on the coronavirus. This time from a negative standpoint. Things got heated after California reported a sharp rise in cases to 7149 from 5019 yesterday. Texas hospitalizations increase by 7.3%. Florida cases rose by 5.3% vs. the 7 day average of 3.6%. New York New Jersey and Connecticut ordered visitors to quarantine if entering their state. Given the amount of tourists into the New York metropolitan area, that would certainly impact economic activity. 

In overnight news, Europe i. S mulling blocking US travelers due to the coronavirus. 

Apple reported that they would close 7 stores in Houston amid the rising coronavirus spike there. Recall Apple close stores and Arizona, Florida, North Carolina and South Carolina last week. 

Feds Evans was somewhat sanguine about economic conditions going forward saying:
  • Expects broad economic recovery but will take time
  • Economic outlook is more uncertain at any time in his career
  • He forecasts a GDP returning to precrisis level later in at 2022
  • He expects intermittent outbreaks, made worse by too fast reopenings, to hold back to growth
  • More fiscal, monetary policy action it may be necessary
  • Low-wage workers in exposed industries face disproportionate pain
  • It's too early to tell if surprising May jobs gains represent stronger underlying demand
Good news surrounding the coronavirus, came in the form of comments from Fox's Charlie Gasparino who said that a 1 trillion the dollar stimulus packages is taking shape.  

In the US debt market, yields moved lower on the flight into the safety of the US treasuries. The biggest mover is the 30 year bond which so it's yield full by around 6 basis points. The yield curve flattened with the 2 – 10 year spread falling to 49.37 basis points from 52.61 basis points at the close yesterday

US yields moved higher with the yield curve flattening

Traders sold stocks with the Dow industrial average falling the most. The industrial 30 were led to the downside by Boeing which tumbled by nearly 6%. All 30 Dow stocks fell as did all 11 sectors of the S&P. For the NASDAQ index its 8 day winning streak was snapped. Yesterday the NASDAQ index closed at a record level, but not today.

  • S&P 500 -80.96 points or -2.59% at 3050.33
  • Nasdaq -222.20 points or -2.19% at 9909.16
  • Dow -710.16 points or -2.72% at 25445.94
In the European equity markets the major indices also closed sharply lower on the day with the German DAX fearing the worst at -3.43%

Below are the percentage changes and percentage ranges for the major indices in North America and Europe.

US stocks and European stocks moved lower

IN the forex market, the flight to safety flows saw the US dollar as the safe haven. It was the strongest currency of the day. Investors shun the NZD and AUD. The Reserve Bank of New Zealand was modestly dovish after its interest rate decision earlier in the Asian session.

The US dollar is the strongest of the majors while the New Zealand is the weakest

A look at some of the major currencies from a technical perspective are showing:

  • EURUSD: The EURUSD it is closing the session below its 200 hour moving average and 50% retracement 1.12577, but just above its 100 hour moving average at 1.12493. Those moving averages will be barometer is for the buyers and the sellers. Move below the 100 hour moving average at 1.12493 and the bears will be more in control. Find support buyers against the 100 hour moving average and move back above the 200 hour moving average of 50% retracement at 1.12577, and we could see the start of a rebound back higher.
  • GBPUSD: The GBPUSD fell below its 100 hour moving average 1.24436 in the New York session and rotated down toward 1.2418.  Earlier in the day the pair fell below its 200 hour moving average at 1.2498 and its 100 day moving average 1.2491.  Being below each of those moving averages has tilted the bias back to the downside. Stay below the 100 hour moving average at 1.2443 would keep the bears/sellers content.
  • USDJPY: The USDJPY moved above its 100 hour moving average at 106.817 earlier in the New York session and is ending the session just above its 200 hour moving average at 107.034. The price is currently trading at 107.06 minutes before the end of the trading day. If the price can stay above its 200 hour moving average that is the best case for the buyers/bulls. Alternatively, staying above the 100 hour moving average would still keep the buyers content (at 106.817).
  • USDCAD: The CAD was pushed higher with the overall USD bullishness today, but God a additional boost after Fitch lowered their rating of Canada debti from AAA to AA+.  Although the investment-grade remains high, it loses that status that comes with the top rated distinction.

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