Forex news for NY trading on May 5, 2021
- S&P 500 finishes flat after a lively ride, Nasdaq down 0.4%
- Fed's Clarida: I don't think it's time to talk about tapering
- Volatility is a drug
- Crude oil futures settle at $65.63
- Oil gives it all back and more as bulls get OPEC jitters ahead of $70
- More from Fed's Mester: Not too concerned that inflation will get out of hand
- Fed's Mester: In the absence of inflationary pressures, Fed will not react to strong jobs market
- Fed's Rosengren: Expects unemployment will be in the range of full employment by end 2022
- European equity close: Big bounce across the board
- G7 to take a united front on criticizing China human rights
- Fed's Rosengren: Significant slack remains in the economy
- US weekly oil inventories -7990K vs -2000K expected
- Fed's Bowman: US growth may be faster than central tendencies of Fed members
- April US ISM services index 62.7 vs 64.1 expected
- Markit US April final services 64.7 vs 63.1 prelim
- Fed's Evans: Economy 'quite a way to go' before reaching goals
- Lane: Acceleration of vaccines and unlocking of economies built into ECB forecasts
- Treasury quarterly refunding at $126B with coupon auctions unchanged, as expected
- The NZD is the strongest and the USD is the weakest as NA traders enter for the day
- ADP April US employment 742K vs 850K expected
On the data front today, the ADP employment numbers for April came in weaker than expected at 742K vs 850K estimate. The BLS will release their employment numbers on Friday with expectations of around 890k vs last month of 780K. The number is a small disappointment but the ADP numbers can be off the BLS numbers. The ADP for last month was revised higher to 565K but still remains well below the BLS number from last month at 780K.
The service sector Markit PMI and ISM services indices showed mixed results versus expectations. The Markit PMI came in at 64.7 were for 63.1 preliminary. That was the best recorded (going back to 2009). The ISM services indices came in at 62.7 versus 64.1 expected. Employment rose (which is positive for Friday's job report), but orders and production were lower.
Fed speakers today included FOMC governor Bowman, Boston Fed Pres. Rosengren, Cleveland Fed Pres. Mester and Vice Chair Clarida. Bowman was positive on the economy but sees a "small risk" of persistent inflation outbreak. Rosengren sees a significant slack in the economy with inflation likely to stabilize around 2%. Fed's Mester is not much concerned that inflation will get out of hand. Finally, Vice chair Clarida said he does not think it's time to talk about tapering.
Looking at market levels:
- Spot gold it is trading up $8.40 or 0.47% $1787.40.
- Spot silver is up $0.01 or 0.04% at $26.51
- WTI crude oil futures are trading down $0.40 or -0.64% at $65.27. Inventory data showed a strong drawdown, but price is still moved back to the downside
- The price of bitcoin rose $2200 or 4% to $56,936. Dogecoin traded as high as $0.67 today, up 15%, as meme traders jumped on the digital currency ahead of Elon Musk's hosting of Saturday Night Live on Saturday.
In the US debt market, yields are ending lower, and near the lows for the day. The 10 year yield is trading at 1.57%, down -2.3 basis points. The two – 10 year spread has contracted to 141.69 basis points after trading close to 150 basis points last week.
In the US stock market, the NASDAQ index fell for the fourth consecutive day. The S&P was near flat then the Dow industrial average rose modestly. European shares enjoyed sharp moves to the upside erasing declines from yesterday's trade:
In the Forex market, the NZD is ending is the strongest of the majors. It benefited early in the new day after the better-than-expected jobs report. The EUR and USD are ending as the weakest of the majors.
Looking technically at some of the major currency pairs vs the USD,
AUDUSD: The AUDUSD bounced off its 100 day MA in the last Asian session at 0.7704 and found sellers against its 200 hour MA at 0.77548 in the NY session. The pair traders between the 100 hour MA below at 0.7737 and the 200 hour MA above at 0.77548. In the new day, traders will be eyeing those hourly Mas for clues to the next directional biasNZDUSD; The
NZDUSD moved away (to the upside) from the 100 day MA at 0.71629 and then extended above the 100 hour MA (currently at 0.71863) and the 200 hour MA (at 0.72041). The move to the upside did make new highs for the week (above 0.72115), but could not sustain momentum to the upside. The pair moved between the 100/200 hour Mas in the final hours of trading, but is trading nearer the higher 200 hour MA at 0.7204. If the price can get and stay above the 200 hour MA and then the high from Monday at 0.72115, I would expect more upside momentum in the new trading day. If the price can not take those steps, and the price moves back below the 100 hour moving average, the sellers would take back more control.
USDJPY: The USDJPY took a quick peek below the 100 hour MA for the third straight day without going very far. The low reached 109.14 with the MA at 109.18. There was a similar modest break on Monday and a even smaller break (1 pip) in trading yesterday. The price is just above the 100 hour MA into the close. In the new trading day, how the "market" resolves the above or below battle of the 100 hour MA, should dictate going higher or lower from here. Be aware that the last 3 days have had failed breaks, so sell below, but look for momentum lower.
EURUSD: The low for the EURUSD today stalled just below a key swing area between 1.1987 to 1.1994. The 38.2% of the move up from March 31 comes in at 1.19792. The current price is at 1.2002. Move below the 1.1987 level would increase the sellers bias. Absent that and the sellers have taken the price down 3 of 4 days, but the price still remains above the 38.2% of the move up from the March 31 low. So watch those levels. If the lows can not breach those lower levels, the traders could push the price back toward the 100hour MA at 1.2045 (and moving lower) and the 100 day MA at 1.20499.
GBPUSD: The GBPUSD scraped along its 100 and 200 hour moving averages in the NY session between 1.3887 and 1.38950 on the downside. The price is currently trading at 1.39048. It would take a move below the aforementioned moving averages to tilt bias more to the downside. Stay above and getting above the 1.3924 - 1.39314 area would be more bullish.
USDCHF: The USDCHF also scraped above its 100 and 200 hour moving averages today at 0.91223 and 0.91273 respectively. If the price is to go lower, it must break back below those levels (the current prices at 0.91319). If it stay's above, getting above 0.91469 high from Monday, and then the 100 hour MA on the 4 hour chart at 0.91571 would be needed to give the bulls more confidence.
