Forex news for trading on June 28, 2017.

  • US stock indices end with solid gains
  • More Patterson: Seeing growth broaden across a number of industries
  • The USDCAD key target at 1.3000 is getting closer
  • BOC Patterson: Economic shock from oil is largely "behind us"
  • US treasury sells 7 year notes at a high yield of 2.056%
  • European stock indices mixed it up today
  • EUR: Two key assumptions in EUR rally will be tested on Friday - Credit Agricole
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  • Aside from Carney, the central bank panel was a dud
  • US weekly oil inventories +118K vs -2250K expected
  • Kuroda: A common theme in the recovery is weak investment despite strong earnings
  • US pending home sales for May -0.8% vs. 1.0% estimate
  • Carney: This is the weakest investment recovery in a half-century
  • Draghi: We're relatively confident we will see productivity improvements
  • Carney: Some removal of stimulus likely necessary as spare capacity erodes
  • Euro bulls not ready to quit yet; but the 61.8% level looms
  • US wholesale inventories 0.3% vs 0.2% est
  • May US advance goods trade deficit $65.9 billion vs $66 billion expected
  • ECB: The market misjudged yesterday's speech from Draghi
  • The strongest and weakest currencies as NA traders enter for the day

In other markets, a snapshot near the close shows:

  • Spot gold is up $2.80 or +0.23% to $1250
  • WTI crude oil is up $0.56 at $44.81
  • US yields are mixed. The 2 year is down about 2 bp to 1.3493%. The 5 year is up 0.5 bp to 1.817%. The 10 year is up 2 bp to 2.2261%. The 30 year is up 2.6 bp to 2.778%
  • US stocks were up strong with the Nasdaq up 1.43%, the S&P up 0.88% and the Dow up 0.68%

The central bankers got involved in trading in the NY session.

First, there was headlines from the ECB that the "market misjudged" the the speech from Draghi yesterday. If you recall, Draghi was a bit more hawkish in his comments, yields soared, the technicals contributed as well as the EURUSD rallied strongly with the EURUSD moving above the November election high of 1.1300. The headline today from the ECB sent the EURUSD price back down to the 1.1300 area (the low reached 1.1292) but bounced higher from there.

Then around an hour and 15 minutes later, BOEs Carney said "some removal of stimulus likely necessary as spare capacity erodes". Face break the other way for the USD. The GBPUSD moved up about 128 pips by the time the rally was complete, testing resistance in the 1.2976 to 1.2989 area (see post here), before settling back down into the close. PS The GBPUSD move higher dragged the EURUSD higher. Those losses on the Draghi comments were fully erased.

The USDJPY stayed more on the sidelines today, watching the action in some of the other movers. The pair is ending the day below the close from Tuesday at 112.33 and could only get to 112.35 in the NY trading session. However, the bullish news is the pair also held support against the 112.00 level. That is the close range for traders in the new trading day.

The CAD is ending as the strongest currency today. Against the USD, the USDCAD traded down to the lowest level since February 17th. In the process, the pair moved to within sniffing distance of a cluster of swing lows at the 1.3000 to 1.3008 level. The low for the day stalled at 1.30125 before rallying back up toward the 1.3041 area at the close. The 1.3000 area is home to a number of swing lows (see post here). There is no denying the levels importance today (and going forward). PS BOC Deputy Governor Patterson spoke in the North American afternoon session and did say the economic shock from oil was behind us (read: it is easier to tighten). She also said that she is seeing "growth broaden across a number of industries". The comments did lead to the last move to the day lows where profit taking/support buyers stuck a toe in the "buy the dip against 1.3000 support" water.

The AUDUSD traded above the June highs at 0.7635 on the overall dollar weakness. The high price moved to 0.7644. In the process, the price moved above the 0.7600/0.7610 area. That level has been a quasi dividing line for bullish above and bearish below in 2017, in the upper portion of the trading range (see the chart below). Stay above that 0.7600 level and traders will be looking to test the high area between 0.7730 and 0.7755 (see post here).

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Below is a snapshot of the strongest and weakest of the major currencies. The CAD is the strongest. The USD is the weakest.