Forexlive Americas FX news wrap: Better ISM manufacturing propels NASDAQ to record
Forex news for near trading on August 3, 2020
- NASDAQ close is at a new record
- Treasury Secretary Mnuchin: Still have a lot of work to do
- AUDUSD rebounds off lows ahead of RBA rate decision in the new day
- Mnuchin, Meadows say relief bill meetings are done for the day
- US treasury borrowing estimate to $947 billion from $677 billion
- Crude oil futures settle at $41.01
- California new cases 5739 vs. 8812 14-day average
- More Bullard: More sympathy at Fed for overshooting 2% inflation
- NY officials suggested they're investigating Trump for bank and insurance fraud - report
- Fed's Barkin: The resurgence in the virus is dampening pace of US economic momentum
- New Jersey to tighten size limit on indoor crowds due to rising virus case count
- Fed's Bullard: July slowdown shows will be ups and downs and recovery
- Atlanta Fed GDP now sees third-quarter growth at 19.6%
- European shares end the session with strong against
- Florida cases rise by 4752 vs. 7104 from the prior report
- ISM manufacturing index for July 54.2 vs. 53.6 estimate
- Markit US manufacturing PMI for July (F) 50.9 vs 51.3 expectations
- WH Navarro: Trump priorities are eviction, jobless provisions
- Fed's Kaplan sees a muted rebound from here
- Goldman Sachs sees the potential for trouble in the non-farm payrolls report
- The USD is the strongest and the CHF is the weakest as NA traders enter for the day
Leading the way in the ISM data was forward-looking new orders which rose to 61.5 from 56.4 last month. The estimate was for a rise to 55.1. Production also rose smartly with the index rising to 62.1 from 57.3 last month. New exports and import orders also increased.
Troubling was that the employment component remains well below the 50.0 level at 44.3. That was higher than last month 42.1 but still signaling a contraction in employment.
US nonfarm payroll will be released on Friday with estimates around 1.5 million new jobs. That is still much lower than the 4.8 million jobs created last month. Goldman Sachs is even lower at 1 million jobs as the threat for a 2nd wave of the coronavirus started to reel its ugly head over the last month or so.
Nevertheless, the ISM data did help propel stocks even higher. It did get off to a good start as the president seemed to give the blessing for Microsoft to pursue purchasing TikTok and despite the troubles in passing a new coronavirus stimulus bill, we all know, words like "we are still far apart"eventually lead to an agreement has been made. The GOP still remains a $1 trillion, while the Dems are pushing for $3 trillion. That stage is the "We Won" title. Who wants to bet that 2 trillion is number.
Fed governors started to speak again after the traditional quiet before the FOMC decision (that occurred last Wednesday). Fed's Kaplan sees a muted rebound from here. Fed's Barkin is cautious about the economic momentum going forward as a result of the restarting of the virus. Even Fed's Bullard – who goosed the market last month after saying he would be surprised to see 8% are lower unemployment rate by the end of the year - started his back track by saying that the virus has been more persistent than the thought it would be. When Bullard thinks too much, he tends to get in trouble.
In the forex market, the CAD his ending the day is the strongest of the major currencies. The CHF is the weakest. The USD close higher but only marginally vs. most of the currency pairs. The one exception would be the Canadian dollar where it lost -0.2% against the loonie. The greenback was the strongest 1st the Swiss franc by 0.53% but closed off its highs.
Some technical levels for the new trading day:
EURUSD: The EURUSD fell below its 200 hour moving average for the 1st time since July 10. It wasn't a successful break as the price quickly moved back above that key moving average. The last 8 hours of trading saw the price move steadily to the upside (the last hourly bar was the only declining bar - there was one unchanged hourly bar). Should that momentum continue into the new trading day, traders will be eyeing the flattening 100 hour moving average 1.17803. Move above and the buyers will have taken back more control. Stay below and is possible for another rotation back down toward the 200 hour moving average in the new trading day at 1.17166 (and moving higher)
GBPUSD: The GBPUSD - like the EURUSD - fell into the early New York session and tested its 50% retracement of the move up from the July 28 low at 1.3003. The 100 hour moving average is near that level and the price traded above and below its for about 5 hourly bars before moving back to the upside over the last 6 or so hours. The 100 hour moving average currently comes in at 1.3039 and a move below in the new day would be more bearish.. On the topside traders will be watching the 1.3100-046 area as topside resistance. Move above increases the bullish bias.
AUDUSD: The AUDUSD move lower than back higher in the New York session. The low for the day stalled just above the 50% retracement of the move up from the July 14 low. That level comes in at 0.70736. The low for the day reached 0.7076. On the topside the 200 hour moving average comes in at 0.71423. The 100 hour moving average comes in at 0.71589. The RBA is back to keep rates unchanged. Any surprise will have traders looking at the aforementioned technical levels for a break and run.
In other markets for the day:
- Gold is closing higher by around $0.44 higher or 0.02% at $1976.35. The high price reached $1988.40. The low price extended to $1960.53
- spot silver is trading down about 7.8 cents or 0.32% at $24.31
- WTI crude oil futures for September delivery closed up $0.48 or 1.19% of $40.75. The price remains below its 50% retracement at $41.71. The high for the day reached $41.24