Forexlive Americas FX news wrap: Dollar falls on the day. ISM non-manufacturing dips

Author: Greg Michalowski | Category: News

Forex news for NY trading on January 7, 2019

A snapshot of the other markets into the close is showing:

  • Spot gold rose $3.61 to $1288.75, but values are off the highs at $1295.15.  Dollar decline helps to support gold on the day
  • WTI crude oil is trading at $48.68 near the end of day as a run toward $50 stalls. The high for the day reached $49.79.  The low reached $48.11
  • Bitcoin on Coinbase fell -$21 to $4009.05. The high reached $40.70. The low extended to $3968.  For a technical look at the digital currency CLICK HERE
The European stock markets were mixed today (German, France, UK down, Spain and Italy higher). The US stock major indices rose on the back of a lower dollar (or so it seems).  The small cap (Russell index) was the big winner, rising by 1.78%. Below are the ranges and % changes of the major indices:

In the debt market in the US, yields are ending higher after being lower at the opening. The shorter end moved up the most as the yield curve flattened by -1.6 bps (2-10 year spread).

The 10 year yields in Europe ended mixed. Below are the changes and ranges for the benchmark yields.

In the forex market, the USD started the day weaker and extended the declines in the NY session. The declines were led by decline in the greenback vs the CHF, EUR, CAD and AUD. In the NY session the dollar rose vs the JPY - helped by the stronger stock market and rebound in rates.  

Fundamentally, the ISM non-manufacturing index came in lower than expectations at 57.6 vs 59 expected.  The manufacturing index released last week (54.1 vs 57.5 expected) was also weaker although both still are comfortably above the 50 level.  

Nevertheless the dollar did continue with a negative bias vs the majors for most of the day.

In Canada today, the other piece of economic news was released with the Ivey PMI. That index came in at 59.7 vs 57.2 last month.   The CAD did move lower in the session with higher oil prices for at least part of the day, contributing to the loonies rise.

Technically, the EURUSD is ending the session a few pips from its key 100 day MA at 1.14773. The price did trend higher for most of the day with corrective moves modest (see post here).  The last few hours has seen more consolidation around the 100 day MA. That has allowed the 100 bar MA on the 5-minute chart to catch up to the price. It stands at 1.1469 into the last minutes of the day. A move below in the Asian session, would tilt some of the bias a little to the downside (but the price needs to stay below that MA line).  

The USDJPY - as mentioned above - did buck the trend and move higher with the help of rising stocks and yields today. The move did extend above the 100 hour MA (at 108.36 currently) and was able to stay above that MA line (see post here).  The pair is trading at 108.714 into the close.  If the price can hold above the 100 hour MA going forward, the upside will target the 200 hour MA at 109.448.

The CHF was the strongest of the majors today and the USDCHF fell 0.79% on the day. That fall took the price right to the lows from last week at 0.9789 and the swing low going back to June 2017 at 0.97875. The low today reached 0.97874. The bounce off the swing lows to 0.9819 - near the 100 bar MA on the 5-minute chart and 50% of the last trend leg down today (see post here).  That retracement stalled the rally and the price is ending the near back near the low floor at 0.9787 (trading at 0.9795).  I would expect the buyers to put a bid in against the low floor once again, but a move below the floor would likely trigger stops in the new day of trading.    

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