Forex news for NY trading on August 8, 2018

In other markets today:

  • Spot gold is trading up $2.88 or 0.24% at $1213.83. The high reached $1216.15. The low extended to $1206.09
  • WTI crude oil tumbled -$2.40 or 3.47% at $66.77. Oil prices fell sharply on trade dispute between the United States and China. China said they would slap a tariff on US crude oil. In addition, weak Chinese import data and a smaller-than-anticipated drop in American crude stockpiles contributed to the declines today.
  • Bitcoin fell on news the SEC would delay a decision on bitcoin ETF. The price is trading down $552 at $6324. The low reached $6121. The high reached $6876. The 2018 low is down at $5777 (on Coinbase) and will be a target on more selling.

In the US stock market today, US shares were mixed and little changed. European shares were mostly lower but UK shares rose on GBP weakness (up 0.75% for the UK FTSE).

In the US debt market today, the US sold $26B of 10 year notes today (30 year auction tomorrow), with no tail and with a bid to cover around the 6 month averaged. Neither great nor disappointing. The yields are ending with modest declines, with the 10 year down the most (-1.1 bps) and the 2 year unchanged from yesterday's levels. Below is the summary of the ranges and changes:

European 10 year yields were mixed with the German and UK yields lower. The other countries saw yields move higher.

Fundamentally today, the US calendar did not have any releases. Canada announce building permits and they fell -2.3% vs -0.1% expectations.

Feds Thomas Barkin was more hawkish with his comments, saying the Fed should continue raising rates, benchmark not yet back to normal level

The winners and losers in the forex market shows that the JPY is the strongest while the GBP is the weakest. The USD which was the strongest currency at the start of the US day, ended up mostly lower vs. the major currencies. Below is the snapshot of the changes for the major currencies.

Technically, below are the views for the major currency pairs:

The EURUSD opened the NA session with the pair testing - and then falling below - the 100 hour MA at 1.1581. The low extended to 1.1572 but quickly rebounded. The next hourly bar was back above the MA line and the rest of the day was spent stepping higher. The pair closed at 1.1615 which was still short of the Asian session high of 1.1627 and the key 200 hour MA near the same level (at 1.1629). If the pair is going higher in the new day, it has to move above that 200 hour MA. Failure and a rotation back toward the 100 hour MA at 1.1581 can not be ruled out either.

The GBP was the weakest of the major currencies and the GBPUSD trended lower into the early NY session. However, the pair did find support against a lower trend line on the daily chart at the 1.28466 level (the low reached 1.2852). That was enough to give sellers cause for pause, and like the EURUSD, the pair stepped higher. Overall, the corrective rise muddied the trend down waters for the day, but could only retrace about 38.2% of the move lower today (at 1.2893). If the price is to continue higher, the 200 bar MA on the 5-minute chart is around the 1.2900 level (the pair trades at 1.2887 near the close). That MA would need to be broken and stay broken. Conversely, if the 100 bar MA on the 5-minute chart is broken on the downside at 1.2876, the buyers will likely give up, with a retest of the lower trend line eyed.

The USDJPY traded above and below a trend line on the daily chart at the 111.09 area. The pair traded up to 111.18 in the NY session after bottoming in the London morning session at 110.827. The last 7 hours of NY trading was spent below the key trend line and as long as it stays below in the new day (closing at 110.97 area), the sellers will own the bias (more bearish). More downside momentum will target 110.75 and the July 26 low at 110.584.

The USDCAD made a run higher in the NA session and in the process moved above a swing high area at 1.3092-95. The high stalled at 1.31197, which was just short of the 50% retracement at 1.3125. The price tumbled on positive headlines on NAFTA (well US Mexico is making progress and that would lead to working with Canada next week). The fall ended up cracking some key support at 1.30388 (a swing level) and then the 200 and 100 hour Mas at 1.3023 and 1.30175 respectively. The key 100 day MA remains a key downward target if the price can stay below the 200 and 100 hour MA. That level comes in at 1.29614 and held support yesterday and on Monday too.

The RBNZ will likely announce no change in policy in the new trading day. The key levels in play can be found by clicking HERE.

The USDCHF had an up and down day, but did more selling in the NY session. In fact, it is closing near day low levels and just below its 200 hour MA at 0.99333. The low for the day reached 0.9927. The 50% of the move up from the July 31 low comes in at 0.9925. Staying below the 200 hour MA and breaking the 50% would be more bearish. A move back above could continue the ups and downs. The 100 hour MA is at 0.9951 and would be eyed as a topside target.

The AUDUSD fell sharply in the London morning session and retraced the whole fall - and then some - in the NY session. The high moved up to test the high from yesterday at 0.74389 which stalled ahead of last week's high at 0.7441. The price is closing at the 0.7430. If the price is to go higher get above this week and last week's highs at 0.7438-40 (and stay above). If it cannot, its ups and downs are likely to continue with the 50% midpoint of the recent range at 0.7405 and the 200 and 100 hour MA at 0.7398-0.7401 as downside targets.