Forex news for the NY trading at February 9, 2017
- Record close for stocks
- USDJPY holds onto the 113.00 support level and is making new highs
- ECB to unleash a 'perfect storm' for EUR shorts - Credit Agricole
- Fed's Evans: Expecting 3 hikes in 2017 is 'not unreasonable'
- Trump tax plan will include individuals and corporations
- Why Jamie Dimon is the best of the best
- Trump and Abe to hold joint press conference Friday
- Mexican central bank hikes rates to 6.25% from 5.75%
- The US has until August to deal with the debt ceiling
- Fed's Evans: We will discuss halting reinvestment after 'a few more' rate hikes
- Not another fake break for the EURUSD...
- Video: What to do when Trump ends the strong dollar policy
- The Atlanta GDPNow estimate unchanged at 2.7%
- BOC's Schembri talks about inflation measurement, nothing on direction of rates
- Fed's Bullard: Fiscal uncertainty won't likely be resolved by March
- Italian PM: Trump and Brexit could be wakeup call for EU
- Trump has made trading on politics great again
- Trump to announce "something" on taxes in 2-3 weeks - It might not be all that it seems though
- December 2016 US wholesale inventories 1.0% vs 1.0% exp m/m
- Trump says he will announce "something phenomenal" on taxes in 2-3 weeks - USD jumps
- Shrinking the balance sheet may allow space for more QE says Bullard
- Bullard: Fed can manage the shrinkage of the balance sheet
- Two out, one in at the Bank of England
- There are no inflation pressures building says Fed's Bullard
- US initial jobless claims 234k vs 250k exp
- Canada December new housing price index +3.0% y/y vs +3.1% expected
- The strongest and weakest currencies as NA traders enter for the day
In other markets:
- S&P is ending at 2307.87 up 13.20 points or 0.58%
- Nasdaq composite index is closing at 5715.18, up 32.72 point or 0.58%
- Dow industrial average is closing at 20172.33, up 117.99 points or 0.59%.
- 2 year yield 1.177%, up 3.62 bp
- 5 year yield 1.866%, +6.4 bp
- 10 year yield 2.394%, +5.8 bp
- 30 year yield 3.008%, +5.9 bp
- Spot gold is trading at 1230.81, -$10.60 or -0.86%
- Crude oil is trading at $53.08, +0.75 or 1.43%
The dollar got a boost today after Pres. Trump said he will announce something phenomenal on taxes in 2-3 weeks. In addition to the dollar moving higher, the comments sent US stocks up (all major indices closed at record highs). bond yields higher (10 year up near 6 bp), and gold lower (by about $10.50). That has been the Pavlovian reaction in the markets on Trump stimulus talk. One day, he will exhaust all the check boxes on his campaign promises and the market will correct, or the market will figure out maybe he has promised too much. However, for the time being, the stock market continues to like the news and the other markets are falling in line.
In other dollar supportive news today:
- Initial claims were lower than expectations at 234K vs 250K est
- Wholesale inventories were up by 1% and as expected.
- Fed's Evans said that he could see 3 hikes in 2017.
By the way, be sure to check out Adam's most recent video "What to do when Trump ends the strong dollar policy"
This time yesterday I said in the wrap that the EURUSD need to get and stay above the 1.0706 for a more bullish bias, and if that failed, a move below the 1.0656 would be eyed. Well the high traded above 1.0706 - but only by 3 pips to 1.0709. On the downside, the price traded below the 1.0656 level but only to 1.0650 - or 6 pips below the key level. We did not exactly run on either break. We are ending the day right around the 1.0656 level. So the sellers are still trying to push. Below the level, 1.06399 and the January 30 low at 1.06195 are the next key targets. If the level holds, getting back up to the 1.0706 is not all that far away. It is getting and staying above that is the hard thing to do.
The USDJPY was the biggest mover against the dollar today. It rose by 1.12% and in the process got close to key topside resistance against the 100 bar MA on the 4-hour chart at 113.379, AND the 50% of the move down from the most recent swing high from Jan 27th. That level comes in at 113.476. In the new day a break above would send the pair toward the next resistance at 113.93-114.00 and then 114.27 (38.2% of the move down from the Dec 15 high). On the downside a move below 113.00 has the potential to take more wind out of the buyers/bulls sails. PS Japan PM Abe meets with Trump tomorrow. Currency manipulation is not on the schedule, but I am sure they will talk about a fairer trading policy. PSS they play golf on Saturday. So they will be best friends by the time the weekend is up.
The GBPUSD had an up and down trading session today. The Asian session low was at 1.2496. The high extended to 1.2581 in the London session. The NY session low reached 1.2491. So the pair did a full lap up and then down. The pair is closing near the lows and also between the 100 hour MA at 1.24877 and the 100 bar MA on the 4-hour chart at 1.2497. A move below that support in the new day, will have traders thinking of another test of the 100 day MA at 1.2444. If support holds, 1.2523 is the 200 hour MA. A break above it, would be more bullish.
The USDCHF broke above its 100 day MA (at 1.0001 in the new day) on the back of the Trump comments. Last week, the pair stalled the fall at the 200 day MA (at 0.9879). The action suggests that the buyers are starting to take more control. If so, look for the 1.0000 to now be support. Stay above is more bullish. Move below and the break higher will be questioned.
The AUDUSD is ending the day near NY session lows and also the 200 hour MA at 0.7625. A move below that level, should start to solicit more selling. The AUDUSD joins the EURUSD, GBPUSD, and USDJPY in ending the day right near a key technical level. Which way will the dollar turn in the new trading day AND will the early directional move be maintained. If the 200 hour MA is broken, the next targets come in at 0.7600-03 and then the 100 bar MA on the 4-hour chart at 0.7589. If support holds, the 100 hour MA at 0.7641 and trend line resistance on the hourly chart cuts across at 0.7654.
Below are the % changes of the major currencies vs each other for the day.
To all my friends in the Asian Pacific session, have a great and safe weekend.