Forex news for trading on March 30, 2017
- Nasdaq closes at record high.
- Forex technical analysis: USDJPY picking up some upside speed.
- More comments from the Banco de Mexico after rate hike.
- Feds Kaplan: Higher US confidence not translating yet to activity
- Banco de Mexico raised rates by 0.25% to 6.50%
- US crude oil futures settle at $50.35/BBL
- S&P says US GDP to grow 2.3% in 2017
- Forex trading education: GBPJPY is sure a choppy pair. How can you trade it.
- And the winner of our Article 50 guess the GBPUSD level competition is...
- FTSE the laggard at the European close
- ECB's Knot: a 2018 rate hike is closer to my expectations
- EIA natural gas storage -43 bcf vs. -43 bcf estimate
- Further hikes will be needed says Fed's Mester
- Trump wants to find ways to penalise FX manipulators - Livesquawk
- The good and bad of US GDP
- Canada IPPI +0.1% vs +0.4% est. RMPI 1.2% vs +0.9% est
- US initial jobless claims w-e 25 March 258k vs 247k exp
- Q4 2016 US GDP final 2.1% vs 2.0% exp q/q ann
- A snapshot of the strongest and weakest currencies as NA traders enter
A snapshot of other markets near the end of the New York session:
- US stocks are ending higher: S&P index +0.29%. NASDAQ composite index closed at a record level up 0.28%. Dow industrial average closed up 69.17 points or 0.33%
- Spot gold fell by $9.30 to $1244.22.
- WTI crude oil futures increased by $.87 or 1.76% to $50.37
- US bond yields were higher. 2-year yield 1.2818%,, up 1.1 basis point. 5-year yield 1.962%, +3.6 basis points. 10 year yield 2.417%, +4.1 basis points. 30 year bond 3.03%,, +4.5 basis points.
The US dollar moved higher in the NY session. The greenback was supported by higher yields. The 10 year note yield increased by 4.1 basis points to move back above the 2.4% level. The 30 year bond yield increased by 4.5 basis points and moved back above the 3% level.
Gold prices fell by nearly $10. That helped to support the dollar.
US stocks were higher as well with the NASDAQ composite index closing at a record level.
On the economic front, the data in the US showed 4th quarter GDP was revised to 2.1% from 1.9%. US initial jobless claims were higher at 258K vs 247K estimate. The data did not have any lasting impact on the market price action.
An article posted by CNBC saying the Trump administration was looking at ways to penalize currency manipulators had a temporary bearish impact on the US dollar. The reaction was worth a 54 pip move to the downside in the USDJPY and about 31 pip move in the EURUSD. However, the fall in the dollar slowed and the market began to focus on other things including the rise in yields, and stocks, and some breaks of technical levels.
Fed speakers today included Mester and Kaplan. Both are on board with more hikes from the Fed (not surprising).
How did the technical pictures impact price action today and what levels are key in the new trading day?
For the EURUSD, the pair is ending the trading day at the lows. A majority of the downside momentum occurred in the NY afteroon AFTER the price fell below a trend line and the 100 bar MA on the 4 hour chart at the 1.0727 level. The pair got another kick lower after falling below another support levels at the 1.0700-06 area (click here). That area was broken and never traded again.
Helping the EURUSD's afternoon selloff was continued weakness in the EURGBP. In NY trading, the pair first moved below the 200 bar MA on the 4- hour chart at 0.8612. That break sent the pair down to the 200 day moving average at 0.8578. The price stalled at that level over the next few hours. However, the pair broke below the key MA in the last few hours of trading. The EURGBP price is closing at the next target level defined by the 100 day MA at 0.8557 - another key technical level for the pair. The EURGBP closed on Tuesday at 0.8688. Yesterday, the Article 50 was triggered by UK PM May, and since than the pair has declined by nearly 1.5%. Nevertheless, the pair sits on a key level. Look for some jockeying between the 100 day MA at 0.8556 and the 200 day MA at 0.8583 as traders take a bit of a breather.
What impact did the EURGBP have on the GBPUSD? That pair rallied in the early US hours. The move higher took the pair's price above the 200 hour MA at 1.2474 and then the 100 hour MA at the 1.2490 level. The high price peaked at 1.2523 - the 61.8% retracement of the move down from the Monday high. When the price moved back below the 100 hour MA level, the buyers started to lose their appetite. Although the pair did not have the momentum that the EURUSD had to the downside, the upside momentum did slow. Even still, the GBPUSD was higher on the day. In the new trading day, if the pair moves back above the 100 hour MA at the 1.2495 area, there should be a continuation of the buying (risk for shorts). Barring that, the shorts should/could look to push the pair back down toward the 100 day MA at 1.2418. Both yesterday and today, the pair has traded below that MA level. However, the breaks have seen the subsequent lows at progressive higher levels. Today's low stalled just above the natural support level of 1.2400 (low reached 1.2402).
The USDJPY moved above the 200 day MA for the first time since March 15th at 111.28, and looked poised for further upside gains. However, the aforementioned Trump story surfaced and the USDJPY quickly retreated back below the key MA level. The low Found support against the 111.00 level. 1B of options were expiring at 111.00 and that may have saved the day for the bulls. The price rebounded, got back above the 200 hour MA, and gathered more upside momentum into the NY close. IN the process, the pair moved back above the 111.57 level. That level corresponds with lows from back in early February and the highs seen on Wednesday and Thursday of last weeK (see post here). Stay above the 111.57 level in the new trading day keeps the buyers in control (Risk for longs now).
Below is a snapshot of the percentage changes of the major currencies against each other. The GBP wwas the strongest currency today rising against all the other majors. The EUR was the weakest. The EURGBP was the biggest % changer, falling by 1.09%
Good fortune with your trading in the new trading day and wishing you a great weekend if today if Friday in your home town.