Forex news for NY trading on June 27, 2019.
- Is it taboo to talk about why people aren't saving?
- Crude oil remains closes above 100 and 200 day MA for 2nd day in a row
- Putin: We will decide on cooperating with OPEC in the next few days
- White House considering indexing capital gains to inflation
- Fed's Daly: We had softer inflation readings, softer jobs report
- Easy come, easy go as Bitcoin falls to $10,500
- U.S. Treasury auctions off seven-year note at high yield of 1.889%
- European equity close: Mixed day with modest moves
- Gold trades up and down respecting 38.2% retracement support.
- Kudlow: There are no preconditions in trade talks with China
- June Kansas City Fed 0 vs +4 prior
- China wants 'balanced' trade deal at G20 but US isn't interested - report
- US May pending sales +1.1% m/m vs +1.0% expected
- Watch out for USD selling on month-end rebalancing
- Pres. Trump to promote reciprocal trade at G20
- China Xi and Japan Abe, agreed to promote free, fair trade.
- US initial jobless claims for the week of June 22 come in at 227K vs 220K estimate
- US Q1 GDP (third look) 3.1% q/q annualized vs +3.2% expected
- The NZD is the strongest while the JPY is the weakest but changes are modest
- Germany June preliminary CPI +0.3% vs +0.2% m/m expected
In other markets today:
- Spot gold is trading down about -$1.00 at $1408. The high reached $1412.23. The low extended to $1398.63. That low stalled at the 38.2% of the move up from the June 17 low, helping to keep the buyers in control
- WTI crude oil settled for the 2nd day in at row above the 100 and 200 day MAs at $58.72 and $58.92 respectively. The contract is trading above those levels at $59.23 currently. Stay above is more bullish. Move below and the run higher to $60 may be losing some steam (the high today could only get to $59.73 today).
Today saw an ok tone ahead of the G20 meeting. The market's hope is that the talks with the US and China start up again. That would be the most likely scenario. What would not be so hot is the powers that be leave G20 with the US looking to put 10% on the other $325B of China goods. Even worse, would be more tariffs and talks are not restarted. What would be a positive surprise is if there are major concessions by China and a deal is imminent.
Although the market seemed to "buy time" today, we did see some "risk on" flows. The NZD and AUD, which tend to be proxies for that trade (and also generally benefit from good news for China), are running neck-and-neck for the strongest of the major currencies today (see the rankings of the strongest and weakest currencies above). The GBP did not have a great day. However pairs like the GBPUSD and the GBPJPY did go to the 200 hour MAs and stalled the fall at the MA level. The new day will decide if that is the end of the fall for now, or do we break and probe even lower. The GBPUSD's 200 hour MA is at 1.26649. The GBPJPY's 200 hour MA is at 136.45.
Other signs of risk on was evident in the stocks. Apart from the Dow which was hurt by Boeing shares, the major indices were higher. The Nasdaq rose 0.73%, but the real winner was the Russell 2000. Now that index tends not to have exposure to China. However, it can also be a proxy for more risk hunting by investors. It rose 1.9% on the day, leading all the major indices in North America and Europe.
Is Bitcoin risk on or risk off or just plain risky? I vote for just plain risky at least more recently. The digital currency moved up some 22% yesterday. Today, the price retraced 25% from the high. A trend line on the hourly held support (see post here) at $10300, but the price is also trading back below the 100 and 200 hour MA (more bearish). The 200 hour MA is at $10809 level currently. Looking at the price right now, the level is $10424. So sellers are in control below that MA level and the $10300 level is at risk for being broken.
Some techincal levels to follow in the new day:
- The EURUSD stalled for the third day in a row near the 200 day/week MAs and swing level support all in the 1.1343-47. The low today reached 1.13472. On the topside, the 100 hour MA comes in at 1.13759. The 1.13927 is the 61.8% retracement of the 2019 high to low trading range.
- As mentioned, the GBPUSD traded a few pips below its 200 hour MA in the NY afternoon session but could not muster much momentum below that MA level at 1.26649). The price is trading at 1.2669 currently. So the price is not far from the support level. If sellers are to take more control, that MA needs to be broken (and stay broken). For now, however, dip buyers are buying against the level.
- The USDJPY frustrated the bears today by moving below the 100 hour MA and 50% at 107.745 only to make it to 107.665 and rebounding back above those key technical levels at the close. The price is not far from the MA at 107.77 currently. A move back below will tilt the bias more to the downside, while staying above could lead to more shorts covering.
- The NZDUSD ist trading between the 100 day MA at 0.6694 and its 200 day MA at 0.67055. The 50% of the move down from the March high is at 0.67095 wihch increases the 0.6694-0.67095 a key resistance area. Do sellers come in against the first test of the key technical levels?
- The RBA is a 68% chance of cutting rates next week but that is not stopping the AUDUSD from moving higher today. The pair is above the 0.7000 level and approaches the 50% of the move down from April high at 0.70178. A move above will eye the 100 day MA at 0.70347.
