Forex news for NY trading on September 24, 2018

In other markets, the end of day snapshot is showing:

  • Spot gold is than $.10 or -0.01% at $1198.86. The precious metal has been trading above and below the $1200 level today (low $1194, high $1204)
  • WTI crude oil futures are up $1.50 or 2.12% at $72.28. OPEC over the weekend said they were not ready to increase production
  • Bitcoin on Coinbase is trading down about $40 at $6630

In the US stock market today, there was a flow out of the big cap Dow stocks and into the tech heavy Nasdaq stocks.

  • S&P closed down -0.35%
  • Nasdaq eked out a 0.08% gain
  • Dow fell -0.68%

European stocks were mostly lower. Below are the changes and the high/low ranges for the major indices:

In the US debt market today, US yields moved higher with the yield curve steepening. The US treasury auctioned $37B of 2 year notes in what was a sloppy auction (high yield was above the WI level and the Bid to cover was the low at 2.44x).

In the European debt market, the 10 year yields were mostly higher with anxiety about the Italian budget weighing on their debt. You can expect a heavy dose of headlines from Italy in the days ahead. The market is on edge with a budget plan due to parliament on Sept 27 or earlier. Today there were signs of a larger deficit and that sent 10-year yields up nearly 12 basis points higher to 2.95%. Below is the summary of the benchmark closing yield levels.

The forex markets had a lot of up and down in the NY session. ECB Draghi spoke in Brussels today and the headlines were on the hawkish side:

  • Labor markets are tightening, shortages in some areas
  • Pick-up in wage growth will continue
  • Domestic price pressures are rising
  • Sees a relatively vigorous pickup in underlying inflation
  • Data vindicate ECB's view on medium-term inflation
  • Sees ongoing, broad-based expansion
  • That led to a sharp rise in the EURUSD to a session high of 1.18147 and to the highest level since June 14. However, the Italian situation and an overall rotation back into the USD sent the pair back lower into the close and into a support area defined by swing levels going back to July in the 1.1743-49 area (closing at 1.1745). Up and down

    The GBPUSD moved higher into the NY session as shorts got no down side love in the Asian session, so they covered in the London morning session. That move up continued more in sympathy with the EURUSDs move higher. However, it's momentum slowed on the test of the pairs 100 hour MA at 1.3163 (the high reached 1.3166) and the price rotated lower. The pair - like the EURUSD - rotated back lower on dollar buying. The price extended down to 1.3110 and back below 200 hour MA at 1.31304. That MA will be close risk for shorts in the new trading day. Despite the fall, the GBP was the strongest currency of the trading day.

    The USDJPY in the NY session followed the pattern - the dollar moved lower, bottomed and rose to new NY session highs. For the USDJPY, it stalled the fall right at its 100 hour MA (currently at 112.456). Last week, the price fell below that moving average twice but with limited success before snapping back higher. Today, traders leaned against the MA and snapped the price to a new session high at 112.83 into the closing hours. The high price from last week reached 112.868. A move above that in the new trading day will look toward a topside channel trend line at 113.06 (and moving higher). ON the downside, if the buyers cannot take out the high (or fails on a break), that 100 hour MA remains a key level to get and stay below (at 112.456 currently).

    The USDCHF ran up to the 100 hour MA and 50% retracement of last week's range at 0.9623 and stalled. Then in the NY afternoon, the price extended above that level to - and through - its 200 hour MA at 0.96407 level. The high reached 0.9649. The 200 hour MA will be a barometer for bulls and bears in the new trading day. Stay above is more bullish. Move below and the bias could shift back toward the 100 hour MA for a retest.

    Below is a snapshot of the strongest and weakest currencies for the day with the GBP as the strongest and the CHF beating out the NZD as the weakest.