Forex news for North American trading on February 3, 2021
- Major indices close mixed and give up gains into the close
- SEC looks to make an example of some GME promoters
- WTI crude oil futures settle at $55.69
- BOC deputy doesn't sound too eager to follow the Fed towards an inflation overshoot
- US Treasury yields are a stimulus proxy
- Not expecting changes from the BOE on Thursday - Citi
- Fed's Bullard: Further rise in inflation breakevens would be welcome
- The US 30 year yield tests high yield for the year and the highest level since March 2020
- Fed survey: 90% of small business owners said sales hadn't returned to pre-pandemic levels
- European equity close: Mixed bag
- Which economies are outperforming and which ones are missing estimates?
- US EIA weekly oil inventories -994K vs -2300K expected
- Biden says he is willing to limit stimulus check eligibility
- January US ISM services index 58.7 vs 56.7 expected
- Markit Jan final US services PMI 58.3 vs 57.4 expected
- OPEC's JMMC won't discuss April output or make policy recommendations
- Fed's Kashkari: Economic recovery will be slow until pandemic is over
- ADP US January jobs report +174K vs +50K expected
- The NZD is the strongest and the GBP is the weakest as NA traders enter for the day
In other markets today:
- Spot gold is down $-4.31 or -0.23% at $1833.60. The high price reached $1844.96. The low extended to $1829.75.
- Spot silver is trading up $0.19 or 0.72% at $26.86. It's high price reached $27.19 while the low extended to $26.49. Recall on Monday, the price searched to a high price of $30.10 before retreating back to the downside
- WTI crude oil futures for March delivery trading up $1.08 or 1.97% at $55.84
- The price of bitcoin is trading up $1551.62 or 4.35% to 37,232. That is just off the high price of $37,263.72. The low price extended to $35,393.80 today.
ADP started the day off with better-than-expected job growth of 174K vs. 50K expected. That would bode well for the Friday employment report which is expected to show a gain of 62K. That report will be released at 8:30 AM ET on Friday. Canada's employment report will also be released on that day.
The gain helped to push yields higher again in the US. The 30 year yield move to the highest level this year and the highest level going back to March 2020. It is ending the day up about 5.7 basis points to 1.926%. The 10 year yield is also higher with a gain of 4.3 basis points to 1.139%. With the move higher in yields, so too has the yield curve steepened. The 2-10 year spread is now up over 100 to 102.20.
In the forex market today, the NZD is ending the session as the strongest of the majors followed closely by the AUD. The GBP is the weakest. Those currencies were in the same order at the start of the NY session. Both the NZD and the AUD extended their gains modestly in the NY session.
The USD is ending with mixed results. The greenback fell vs. both the Ozzie and New Zealand, were near unchanged levels verse the JPY and CAD, and had modest gains vs. the GBP, CHF, and EUR.
Some technical levels to high into the new trading day:
- EURUSD: The EURUSD bounced off old swing highs from September and November 2020 at 1.20027 to 1.2010. The low price today reached 1.20035 before bouncing. Into the close, the price extended above a topside trend line on the hourly chart at 1.2026 currently. On further momentum, traders will target the 1.20529 to 1.20577 swing area (swing lows from January 18, January 27, and February 1), and the 38.2% retracement of the move down from last Friday's high which cuts across at 1.20614. Getting back above those levels would be more bullish. Stay below (or move back below the broken trend line) could see another run toward the 1.2000 key support area.
- GBPUSD: GBPUSD stay below resistance against the 100 and 200 hour moving averages at the highs on Wednesday (at 1.3684 currently) and support at 1.3610 (61.8% retracement and double bottom from January 26 and February 2). The pair is closing near the 50% retracement of the move up from January 18 at 1.3635. That Will be a barometer in the new trading day. The pair has been in a wider up and down range between 1.37582 and 1.36103 with the moving averages between 1.3684. At some point, there will be a break outside of that trading range. Be aware
- USDJPY:The USDJPY trading within a 18 pip trading range (yes 18 pips). That has the pair within a wedge that is converging (it will converge within the next 8 hours). As a result, look for some sort of break today with momentum hopefully. On the topside 105.183 is the next upside target (the current price is 105.00). On the downside, the rising 100 hour moving average at 104.843 is the next downside target. Get below that level and the 38.2% retracement of the move up from January 28 at 104.786 would likely tilt the bias more to the downside
In the equity markets today, the major indices are ending the session with mixed results. While the S&P and Dow industrial average at small gains, the NASDAQ index had a small loss and snapped a today winning streak. In Europe, most of the major indices closed higher for the 3rd consecutive day this week. The UK FTSE 100 was the exception. France's CAC closed near unchanged.
Below is a look at the percentage changes in ranges for North American and European indices:
