Forex news for North American trading on April 8, 2021
- Major indices close higher. New record for the S&P.
- US crude oil futures settle at $59.60
- CNN is reporting that the US is considering sending warships to Black Sea
- Feds Kashkari: Fed won't raise rates preemptively
- Gold climbs to the highest since March 1
- Fed's Powell. Vaccinations, monetary policy and fiscal policy creates brighter outlook
- European shares end the session mostly higher
- Feds Bullard: No end to the pandemic yet
- US treasury announces auction calendar for next week
- IMF communiqué: Global economy recovering faster than expectations
- Weekly US initial jobless claims 744K vs 680K expected
- The JPY is the strongest and the USD is the weakest as NA traders enter for the day
In other markets:
- Spot gold is trading up $18.64 or 1.07% at $1756.36. The high price of $1758.77 is the highest since March 1. Lower rates/lower USD helped to support the price of gold (and silver) today.
- Spot silver is up $0.33 or 1.32% at $25.47
- WTI crude oil futures are up $0.10 or 0.17% $59.87. That is just off the high price of $59.92. The low price came in at $58.82. Overall the price action today in the oil complex was fairly narrow
- bitcoin is trading up $1447 or 2.57% of $57,668.32. It's high price reached $58,152. The low price extended to $55,700
US initial jobless claims came in weaker than expected for the second week in a row. The rising claims to 744K from 728K last week (est. 680K) was a head scratcher compared to other employment data including the nonfarm payroll from last week, and the recent JOLTS job openings data.
The weaker data and continued pounding by Fed officials including Fed Chair Powell, Minneapolis Fed Pres. Kashkari and St. Louis Fed President Bullard that risks remain, that inflation may rise but that it is temporary, that the Fed will keep policy accommodative until full employment and through the expected tick up in inflation, helped to continue the push lower in rates. The 10 year yield is down over five basis points at 1.6227%. The low yield reached 1.6156% today (the lowest since March 25). The high yield for the year reached 1.774%. It is still well up from the end of year level of 0.92%.
The declline/steady rates continue to help the stock market. The S&P index closed at a new all-time high. The Dow is just 24 points away from its highest close. The NASDAQ - which has lagged the cyclical recovery stocks in the Dow and S&P - is just 1.89% from the all time high close.
The lower yields helped to weaken the dollar. Looking at the strongest to the weakest, the NZD and CHF the is ending the day as the strongest of the majors. The GBP and the USD are fighting it out as the weakest. The USD fell the most vs the CHF and NZD (both fell around -0.66%)
- EURUSD: The EURUSD broke to a new week high in the NY afternoon and extended outside the 55 day range over the last two days of trading. The move higher took the price back above the 200 day MA at 1.1886. Stay above that level keeps the buyers more in control. A more bullish play would have the price stay above 1.1900. The next upside target is 1.19461.
- GBPUSD: "Lie down until the feeling goes away". I started to feel that way with regard to the GBPUSD yesterday and the feeling continued today as the pair chops up and down (see post here). However, if I were to give a bias for the pair, it would be to the downside below 1.3758. Better is if the price stays below 1.3742. If that can happen, the swing low from March 30 at 1.37054 would be targeted followed by the 100 day MA at 1.36772. Of course, the chop and continue to chop so although traders may be awakening from the self impose hibernation from the pair with a bearish bias (bears do hibernate), there is a chance they go back to sleep if the chop continues with a move above 1.3758
- USDJPY:The USDJPY fell to the lowest level going back to March 25 today to 108.992 (call it 109.00). Whether it was options or just the natural support at 109.00, the pair stalled and corrected modestly higher for the rest of the day. The corrective high in the NY session reached 109.313. That was still short of the broken 61.8% of the move up from the March 23 low at 109.377 AND the swing low from March 29 at 109.36. In the new day, stay below the aforementioned levels, keeps the sellers in control with a break below 109.00 opening the downside toward 108.85 and then to the 108.60 area. A move above and 109.592 would be targeted.
- USDCHF: For the USDCHF, the price trended lower today, but consolidated/corrected over the last hour or two of trading. If there is a level to eye in the short term it would be the falling 100 bar MA on the 5 minute chart. The price stayed below that MA for most of the day (it broke back below in the Asian session). The MA comes in at 0.92448 (and moving lower). Move above and we could see some corrective price action to the upside.
Wishing all in Asian market a good weekend.
