Forex news for NY trading on September 8, 2016
- US equities end the day in the red
- US Consumer credit for July 17.713B vs 16B estimate
- WTI oil futures settle sharply higher on the day
- What a few hours can do to a currency.
- ECB disappoints but will act soon - ABN AMRO
- Dollar approaching target levels in many pairs
- The US dollar bid is relentless
- Canadian housing starts fall in August
- Forex technical analysis: EURUSD tests a key support level
- Fed's Brainard schedules speech for Monday
- Bank of Canada's Lane: Economy is running on two speeds
- Fast break the other way in the USDJPY
- UK's Hammond: Publically spelling out negotiating strategy is a bad idea
- Bonds helping to underpin demand in yen crosses
- European stock markets edge lower, yields higher
- EIA weekly US oil inventories -14513K vs +905K expected
- Buying USD/CAD is a compelling risk/reward trade - Goldman Sachs
- Tough to pin down what's expected in the oil storage report
- Dollar strengthens across the board. A look at the some of the major currency pairs.
- USD/CAD ignores the rally in oil
- Draghi: ECB has 'full mandate' to redesign QE
- Draghi Q&A: There is no question about will or capacity to act
- Full text of the ECB introductory statement from Mario Draghi on Sept 8, 2016
- Draghi Q&A: No additional stimulus needed for the time being
- What we learned from the ECB introductory statement
- ECB leaves growth and inflation forecasts largely unchanged
- Draghi's press conference: We continue to expect moderate, steady growth
- The weekly US initial jobless claims 259K vs. 265K estimate
- Canadian July new house price index +2.8% y/y vs +2.5% y/y exp
- The strongest and weakest currencies as NA traders enter for the day
With data fairly light - US initial jobless claims came in a touch better than expectations and continue to show strong labor markets in the US - the market was keen on what ECBs Draghi was to say.
The price action was volatile and choppy as the headlines from his prepared remarks were interpreted by market traders. Overall, the ECB said they expect moderate, steady growth, but would continue to monitor the markets. They acknowledged that there were downside risks and they would evaluate various bond buying options. The ECBs growth numbers were increased by 0.1% in 2016 but lowered by 0.1% in 2017 and 2018. As for inflation, the expectations - for the most part - remained unchanged but still below the 2% target (2017 they see 1.2% and 2018 1.6%).
The EURUSD was able to extend to new session highs and above technical resistance at 1.1318 not once by twice as he spoke However, each look above the resistance was short lived. When he was finished answering questions, the pair started to give up the gains for the day. US bond yields which were also marching higher, also helped to contribute to the better buying in the dollar. By the end of the NY session, the dollar went from being the weakest to being one of the strongest, only behind the EUR which had a bullish head start in the London morning session. It was a great comeback for the dollar.
The EURUSD closed yesterday at 1.1238 and the low for the NY session stalled just above that level at the 1.1240 level. So the pair never went into the Red - at least in the NY session - but seeing it was up about 88 pips at the highs, it was a moral victory for the bears to get back to just above the closing level. PS the low stall just above the 100 bar MA on the 4-hour chart at 1.1238. That will be a level to eye should the selling re-intensity in the new trading day. On the topside in the new trading day, keep an eye out for the 1.1270-72 area. A move above and the buyers may start to come back in.
The GBPUSD and the USDJPY were content during most of the Draghi presser to just watch the EURUSD buyers and sellers beat each other up. Then toward the tail end, there were some technical breaks that started a full force race into the greenback (helped by rising bond yields and techncials). For the GBPUSD, its price fell below the 100 hour MA at the 1.3343 level. When the correction on the first dip stalled right before that key technical level, the sellers jumped on the sell side and pushed the pair to the 1.3280s before finding buyers. For this pair, note that the 200 hour MA is at 1.3252. If tested, there should be support buyers leaning with a stop below.
For the USDJPY, this pair was stuck in a 50 pip trading range before the dollar buying began. By the time the day was over, the range had been extended to 119 pips and the price kissed the 100 hour MA at the 102.566 level. There is a bunch of resistance that goes up to 102.83 including the 200 hour MA at the 102.748 and a number of swing lows and highs between 102.65 and 102.83 (going back to July 1. Look for sellers against the 102.83 level on a test, with stops above in the new trading day.
It is not often that oil prices go up by over 4% and the CAD is weaker, but that is what we experienced today (at least against the USD). Oil got it's boost from inventory which blew the socks off of the expectations, but it may be all hurricane related. That still did not stop crude oil from racing higher, but the USDCAD chose to follow the dollar. At the close, the USDCAD had moved above the 100 hour MA at the 1.2900. Stay above and it is more bullish for the pair. Move below and the traders might be hedging against the rise in oil after all.
Both the AUDUSD and the NZDUSD also moved in a dollar favorable direction (for those pairs, the price moved lower). Each found support near their respective 100 hour MAs. For the AUDUSD the 100 hour MA comes in at 0.7641 and the low went to 0.7636. The pair is closing right at the level. For the NZDUSD, the 100 hour MA come sin at 0.7381 and the low traded to 0.7384. For both, the MA levels will be eyed for bullish or bearish clues in the new trading day.
That about does it for the wrap. China has inflation data coming out in the new trading day. In Europe, Trade balance in Germany and the UK will be released along with Swiss employment (or unemployment). France will release Industrial production. In the US tomorrow Wholesale inventories are the only release but Fed's Rosengren will be speaking at 7:45 AM ET/1145 GMT. In Canada the employment data will be released at 8:30 AM ET with expectations for an employment change of 16K (unemployment rate of 6.9%).
Below is a snapshot of the percentage changes of the major currencies vs each other. The EUR was the strongest currency followed by the US dollar. The NZD and JPY were the weakest on the day.
Good fortune with your trading.