Forex news for trading on June 9, 2017...

  • A big down day in the Nasdaq as the high flyers take it on the chin
  • CFTC commitment of traders: EUR long positions stays near 10 year high
  • Nasdaq down 154 points or -2.42% in Friday rout
  • Treas Sec. Mnuchin: NAFTA revamped to be positive to US/Canada economies
  • US Sec. of State Tillerson: Maybe you should lighten up a bit
  • Nasdaq stocks skid lower. S&P remains up
  • Baker Hughes oil rigs 741 vs 733 last
  • Low-1.20s possible again after UK election - BNP Paribas
  • Hammond confirmed as UK Chancellor in new cabinet
  • The Atlanta Fed GDPNow forecast dips to 3.0% from 3.4% on June 2
  • UKs FTSE index rises 1.0% despite election uncertainty
  • NY Fed US GDPNow forecast stands at 2.25% in 2Q
  • Fitch weighs in on UK election and impact
  • US 10 year note trades at highest yield for the week.
  • US wholesale inventory -0.5% vs. -0.3% estimate
  • Ireland's DUP party to talk with May about forming coalition government.
  • Gold tumbles. Down 1% on the day now.
  • Canada capacity utilization 83.3% vs 83.5% est
  • Canada May employment +54.5K vs +15.0K expected
  • The snapshot of the strongest and weakest currencies as NA traders enter

In other markets, the end of day snapshot shows:

  • Spot gold down -$10.83 to $1267.22
  • WTI crude closed up $0.17 or +0.37% to $45.81
  • US yields were higher but gave back part of the rise: 2 year 1.338%, up 2.4 bp, 5 year yield 1.769%, up 1.9 bp. 10 year 2.202%, up 1.3 bp. 30 year 2.857%, up 0.6 bp

The UK election was the focus 24 hours ago when the UK exit polls predicted that the Conservatives would win 314 seats to 266 for the Labour. That total for the Tories was short of the prior 330 seats owned before the election and well short of the over/unders that were in the > 350 region.

The final tally ended up being a bit better with the Conservatives at 318 and Labour at 262, but the numbers were short of the majority of 326. Bad day for PM May. The over/under for her remaining run as PM is now being made.

The news sent the GBP pair tumbling lower but there still was a limit to the selling. For the GBPUSD the pair got within 21 pips of the 100 day MA which does not seem so close but when the range is 319 pips (and all those pips were to the downside), 21 pips is close enough. After the bounce took the price above the 1.2688 and then 1.2700 levels (1.2688 is the 38.2% retracement level - see post here), the market traded mostly between 1.2700 and 1.2778. Into the new trading week, the 1.2791-1.2800 will be a key resistance area on the topside. The price has to stay below to keep the sellers down here happy. On the downside, the 1.2688 level, followed by the 100 day MA at 1.26165 and even more important technical support at 1.2580 where the 200 day MA AND the 50% retracement are found, will be levels to eye on further weakness. With all the ? marks in the UK at the moment - from leadership, to Brexit, to coalition deals, to what is going to happen to the financial industry which was traditionally the financial hub of Europe - the sellers seem the most likely to be in charge. Stay below the 1.2791-1.28000 and start working through the support targets, and we could end up staring at that key, key support at 1.2580.

The UK election was the dominant news story, but in the NY afternoon, some of the news headlines were replaced with "Tech stocks tumble" instead. The Nasdaq composite index fell by 113.84 points or -1.80% to 6207.92, That actually was "a result" as at one point the index was down another -70 points. Ouch. The "great rotation" was on as the S&P ended around unchanged levels and the Dow was up 89 points or +0.42%..

The fall in stocks had a negative impact on the USDJPY. It fell below its own cluster of technical levels at the 110.40 level. At that level sits the 50% midpoint of the June trading range, the 200 hour MA, AND the 200 day MA. That is a lot of bullish above and bearish below tech technical barometers. On the break, the bias turned more to the bearish side. The pair traded down to 110.12 in the NY afternoon session, before bouncing and closing near 110.28. In the new week, that 110.40 level will not be forgotten. It remains the key barometer for trading bias.

The EURUSD fell in sympathy with the GBPUSD but is only ending day down -0.15% vs the greenback. The pair bottomed out near a floor area defined by a number of swing lows going back to May 24 (see post here and here). That support floor comes in at 1.1161-71. Then the price wandered higher in the NY afternoon session toward resistance in the 1.1196-1.1208 ceiling area. The rally stalled at 1.1204 and the pair is closing around the 1.1292 level. Floor at 1.1161-71. Ceiling at 1.1196-1.1208. That is the next battle. I would like to give the sellers the nod, wink, secret hand shake, but those sellers could have the buyers turn on them, if the ceiling is broken. So define and limit your risk and hope the buyers don't have a sneak attack.

The USDCAD had employment stats today. There was no competition from the US data this month, so the focus was on the loonie. The data was strong and the USDCAD fell (CAD higher). Net Change in employment was 54.4K vs 15.0K estimate. The employment rate came in as expected at 6.6%. The mix of jobs was skewed in favor of full time workers (+77K full time, vs -22.3 K part time). For the USDCAD, it fell below it's 100 and 200 hour MA at 13480-84 (bearish), and continued on to the next key support target at the pairs double bottom (see post here) at 1.3426. The low reached 1.3424 and bounced. The rebound in the North American session, took the price to 1.3472 (nearly 50 pips), but short of the 1.3480-84 level where those MAs are found. So the double bottom is now a triple bottom. Key support. The 100 and 200 hour MAs at 1.3480-84 is topside resistance. Key resistance. Use those levels to your trading advantage in the new trading week.

For the AUDUSD today, it really did not do much today. The range was only about 25 pips. So what could I possibly say worth a darn? Well, at the lows, the price moved below the 100 hour MA at 0.7522 (at the time) AND a floor area at 0.75216-24. That break should have solicited selling. It did not. Bullish right? Well, the problem is, the topside trend line at 0.7533 (currently), stalled the rally. The 25 pips range for the day,is now contained by a more narrow 12 pip wide floor and trend line ceiling (see chart on the post here). Something has to give next week. Watch the trend line above. Watch the floor and go for it on a break. Here is the SnapChart of the pair. It does not have to get complicated. PS Another "bizarre" level to watch in the AUDUSD is the 0.7500 level. This week, the level held, was broken and on the break it had to stay above to keep the buyers in firm control. It did. BUT, the rally to 0.7566 was not a whole lot to "write home about". Nevertheless on a break of 0.7521, keep a close eye on 0.7500 too.

I feel like the NZDUSD is topping. Trend lines have been broken. Channels have been broken. However, there is little in the way of downside momentum. Here is a picture and a comment. "if the price can get below the 100 hour MA and the double bottom today, sell.... (it has to stay below on a break too). That's it for that NZDUSD.

Below are the % changes of the major currency pair vs each other. The Cad is the strongest (it was stronger though) and the GBP is the weakest (but it was even weaker).