Forex news for NY trading on February 8, 2017
- Nasdaq another record close. S&P up marginally, but not a record
- Analysts react to the RBNZ decision
- NZDUSD initial move is lower after decision
- Full text of the RBNZ statement
- New Zealand dollar quickly lower on the OCR decision
- RBNZ holds rates at 1.75%, as expected
- Canada threatens to 'respond appropriately' to any US border tariffs
- A technical look at the NZDUSD into the RBNZ decision
- BOE's Cunliffe raises alarms on deregulation
- US sells 10-year notes at 2.333% vs 2.320% WI
- Two polls say Le pen would lead in first round but lose to Macron in second
- EURUSD having trouble above 1.0706
- Germany denies they tried to get G20 to push for tighter monetary policy
- US oil imports at the highest since 2012
- EIA US oil inventories 13830k vs 2500k exp
- The well behaved dollar bounces from support
- Trump didn't know if he wanted a strong dollar or a weak dollar
- If EU makes slow progress on US trade deal they should speed up others says Merkel
- Canada January housing starts 207.4K vs 197.3K expected
- The strongest and weakest currencies as NA traders enter for the day
- BOE's Cunliffe: Sees upside and downside risks to the outlook
In other markets:
- US stocks are mixed with the Nasdaq up 0.15%, the S&P little changed and the Dow down -0.18%
- US treasury yields were lower and the yield curve got flatter. The 2 year was down 2 bp, The 10 year was down 5.4 bp and the 30 year lost 7 bp
- Spot gold is ending the day up $7.64 ro 0.62%
- Crude oil survived a massive increase in inventory and ending up $0.24 or +0.46%
The RBNZ kept rates unchanged at 1.75% but reiterated that there are a lot of global "uncertainties" and "policy may need to adjust accordingly". The central bank also reminded traders in the statement that "a decline in the exchange rate is needed". The "dovish" overtones sent the NZD lower against all the major currencies. The NZDUSD fell to a support area defined by recent lows (see post here) between 0.7236-46. A move below that area should solicit more downside with a move toward the 0.7178 (38.2% of the move up from the December 23 low, a viable target. A move back above the 200 hour MA and broken trend line at 0.72932 would not be welcomed by sellers (risk for shorts now).
The USDJPY held support against yesterday's low (the low yesterday was 111.583. The low today was 111.624), and moved back higher after the US 10 year note auction was a stinker and treasury yields recovered. The rebound in yields and the USDJPY was short lived and the USDJPY has moved back lower into the close. The pair is closing below the 111.98-112.06 level which is more bearish for the pair (see post about the level here). The low at 111.58 becomes the next hurdle to get below. If there is a recovery, watch the 100 hour MA for bullish clues. The 100 hour MA (currently at 112.359) has been tested a number of times over the last 4 trading days - with no hourly closes above since June 30th). If this pair is to move back higher, that MA will need to be broken (and stay broken).
For most of the NY trading session, the GBPUSD traded above and below the 200 hour MA AND the 50% retracement at 1.25259. We are ending the day ABOVE those technical levels (more bullish - see yellow area in the chart below). If the price can extend above that area now, it should lead to further upside momentum. A move back below the 200 hour MA and the 50% retracement at 1.2525 would have traders thinking that a test of the 100 hour MA and the 100 bar MA on 4-hour at 1.2485 would be more likely.
The oil inventory data today showed a large increase. That sent crude oil prices and the CAD lower but the moves stalled. The prices for oil and CAD reversed. For the USDCAD, it is ending the day lower (CAD higher) with the pair testing the 200 day MA at 1.3134 That MA has been a bearish below/bullish above line in the sand. Last Tuesday, the USDCAD tested that MA and stayed below. On Monday this week, the price clawed back up to the MA line and stalled. On Tuesday, the MA was broken and the price moved to a high of 1.3211. Today, it is another test. This time coming from the topside to test support. Staying above keeps the buyers/bulls in control. Moving below will be more bearish.
The EURUSD was able to move above the 1.0706 level today. That level was support on Friday and Monday and resistance on Tuesday. The move above today should have solicited buying, but the rally could only get up to 1.0713 before moving back lower. That was not exactly what the buyers wanted to see. The price is closing below that level at 1.0694. Overall, it is not that far away from the key level. However, until the price can get above that level -and stay above - the sellers will be more in control On the downside, watch 1.0656 for selling clues. A move below would be more bearish in the new trading day.
Below are the % changes of the major currencies vs each other for the day. Apart from the late day fall in the NZD pairs, most of the other currencies may have had up and down price action, but most are withing shouting distance of the closes from yesterday.