Forex news for New York trading on August 29, 2017

In other markets, a snapshot near the end of the day shows:

  • Spot golds moved back toward unchanged after being up about +$18 at the highs on the back of the No. Korea missile launch. The price is trading at $1309. The high reached 1326.16. The low extended to 1305.10
  • US crude oil futures are lower by -$0.20 to $46.36. The refinery closes in Texas due to Harvey, has the supply building
  • US stocks reversed sharp losses from earlier in the day. The S&P ended the session up 2 points or 0.08%. The Nasdaq closed up 18.87 points or 0.30%. The Dow rose by 56.97 points or +0.26%
  • US yields were lower but they too were off flight to safety lows. 2 year 1.317%, down -0.7 bp. 5 year 1.703%, down -3.6 bp, 10 year 2.127%, -3 bp. 30 year 2.7392%, -1.6 bp.

Today's North American price action saw a lot of reversals.

At the start of the day:

  • The dollar was the weakest currency. It ended up on the daycurrency
  • Gold was up as much as $19 points. It ended the day near unchanged
  • The S&P index was down as much as -16 points and is ending up 2. The Nasdaq was down as much as -53 points and is ending up 18 points
  • Bond yields bounced of low levels but remained lower on the day

So there were some big reversals in the market.

Catalyst?

The concerns about the No. Korea started to lesson. Pres. Trump issued a warning saying: "Threatening and destabilizing actions only increase the North Korean regime's isolation in the region and among all nations of the world. All options are on the table".

The UN was also loud in their response.

From an economic standpoint, the US Case Schiller home price data inched up to 5.65% y/y from 5.6% last.

Later the US consumer confidence was strong, rising to 122.9 from 120.7. This represented the 2nd highest reading since 2000 and was led by present situations which rose sharply from 151.2 vs 145.4 prior. That was helpful to the greenbacks recovery as well as stocks.

Perhaps the biggest beneficiary of the big reversal was the USDJPY. In trading today, the USDJPY saw the price trade to new swing lows and get close to the April 2017 low at 108.12 (the low today reached 108.24). The rebound saw the pair, take out the high from yesterday and by the end of the day, the price was trading above the prior day close by 39 pips (or 0.35%). To give an idea of the extend of the reversal, at the lows for the day, the pair was down about -100 pips. In the new day, if the key reversal keeps the buyers excited, we should see a move back above the 110.00. level.

The EURUSD's day was more about erasing the gains. The pair raced higher in the early European trading - moving above the 1.2000 and 1.2042 (swing low from July 2012). When the markets started to reverse, there was a move first back below the 1.2042 and then the 1.2000 level. That level is back to being upside resistance in the new day. The fall erased all the gains for the day and the pair is closing virtually unchanged. If the high is in place, I would expect sellers to re-lean against the 1.2000 level going forward now.

For the USDCAD, it seemed a bit strange to have the pair move lower and to new month lows. Trump was bad-mouthing the NAFTA, oil prices were falling. The IPPI and RMPI data were lower than expectations and and dollar buying started to reverse its trend and new highs for the day were made (after trading down about -60 pips at the lows) and the 200 hour MA was tested at 1.2550. Although that MA did find willing sellers, the pair is ending the day higher. It trades above the 100 hour MA at 1.2506 but below the 200 hour MA at 1.2550.

Below is a snapshot of the % changes of the major currency pairs vs each other.

As far as volatility goes, most of the currency pairs had long high to low bar with long tails. The trading ranges were also mostly higher vs. the 22 day averages.