Forex new for trading on June 26th 2017

  • US stocks end the session mixed but off highs
  • US - CBO says 22 million people would be uninsured in 2026 under Senate health bill
  • Former Fed chair Bernanke: US recovery has room to run
  • US crude oil futures settle at $43.38
  • CBO to issue score of the Senate draft healthcare bill later today
  • 2 year auction comes in at 1.348%
  • Supreme Court allows the enforcement of parts of the travel ban order
  • European stock indices advance to start the week
  • ECB Draghi: Interest rates have to be low for growth to recover
  • EU Brexit negotiator: More ambition, clarity and guarantees needed..."
  • Dallas Fed manufacturing index 15.0 vs.16.0 last
  • The US government uses the Federal Reserve to spy abroad
  • Atlanta Fed GDPNow estimate for 2Q growth remains unchanged at 2.9%
  • ECB calls for more detail on Greek debt relief measures
  • PM May: Strong sense of mutual goodwill to reach early agreement on EU citizens
  • JD Powers warns about June auto sales
  • Fitch: Latest Fed hike underscores that Fed is on track for one more in 2017
  • Chicago Fed (May) national activity index -0.26 vs 0.20 est
  • May US prelim durable goods orders -1.1% vs -0.6% expected
  • The strongest and weakest currencies as NA traders enter for the day

In other markets today, a snapshot of the changes shows:

  • Spot gold moved down -$12.50 to $1244.24
  • WTI crude oil prices traded up $0.40 to $43.41
  • US yields are modestly lower. 2 year 1.332%, -0.8 bp. 5 year 1.7549%, unchanged. 10 year 2.133%%, down -0.9 bp. 30 year 2.6948%, -2.0 bp
  • US stock indices ended the session mixed. The S&P close up 0.03%. The Dow ended up 0.07% but the Nasdaq is ending the session lower by -0.29%

The NY session saw the US dollar get hit early on after weaker than expected durable goods orders (-1.1% vs -0.6%). At the same time, the Chicago national activity index a compilation of 85 economic indicators, turned to negative at -0.26 vs 0.20 expected. 53 of the 85 indicators were negative contributors. In other news today:

  • ECBs Draghi said that the Greek debt relief was still ambiguous enough to not make it qualify for ECB QE purchases. He also commented that interest rates have to be low for growth to recover.
  • The Dallas Fed mfg index fell to 15.0 from 16.0 last month;\
  • The Congressional Budget Office said 22 million more people would be uninsured as a result of the Senates healthcare draft but the deficit would be cut by 321 B. That is better than the House version (23MM and 119B for the House plan).

The USDJPY moved lower on the durable news, falling to the 100 hour MA at 111.31. The low stalled at 111.34 just a few pips off the MA target. The inability to move lower led to some modest covering. That covering started to pick up more steam on a move above the 111.71-78 area That area has swing highs going back to June 20th and even earlier in today's trading (London morning session). The 111.78 level is where the 100 day MA cut across today. A break of that area (now support as we head into the new day) sent the price to the highest level since May 24th (high reached 111.945). IN the new day the 112.125-19 will be eyed as the next upside target as long as the 111.71-78 provides support.

The EURUSD had its share of up and down swings today. Like the USDJPY, the EURUSD followed the "lower dollar" path (higher EURUSD) after the weaker durable goods. That sent the price to the highest level since June 15th to 1.12193. However, once the price fell back below the 1.12068 (that is the 50% of the move down from the June 14 high) and the natural 1.1200 level, the selling became more steady. The low in the NY afternoon session stalled ahead of the 200 hour MA at 1.1171 (the low reached 1.1175). That MA line, followed by the 100 hour MA not far away at 1.1166 will be a key bullish above and bearish below dividing line for traders. Over the last 7 trading days, the EURUSD has been stuck in a narrow 100 pip trading range. The 50% midpoint comes in at 1.1168 making the area around the 100 and 200 hour MA (between 1.1166-71) even more important in the new trading day.

The USDCAD fell in Asian/London morning trading despite lower oil prices. Of course the durable goods did have a negative impact early. When the price of oil fell below the $43 level, a bid started to come into the pair. That bid was helped by the USD rally later in the day. The NY session high corrected to the 200 hour MA level at 1.32535 level (the high reached 1.32535) and some modest selling entered into the NY close (only about 8 pips but the 200 hour MA held). Needless to say that 200 hour MA at 1.32535 will be an early resistance level in the new trading day. Stay below and the sellers remain in control. PS the low today at 1.3211 was just above a support area defined by a series of swing lows (see post here) at 1.3203-1.3210. If the sellers against the 200 hour MA keep the pressure on, that level will be eyed as a key level to get below for the sellers. Be aware.

For the AUDUSD, the pair moved above its 200 hour MA after durable goods data and held support against the level (at 0.75818) on the dollars late day rise (AUDUSD fall). In the early minutes of the new session the price is moving below, turning the bias a bit more bearish in the early part of the new trading day.

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Below is a snapshot of the changes in the major currency pairs today. The AUD is ending as the strongest currency. The JPY is the weakest.