Forexlive Americas FX news wrap: Senate tax plan announced. Corp. tax deduction delayed a year.

Forex news for NY trading on November 8, 2017.

• The US stocks end lower, but its one of those down days that seem like an up day
• U Mich consumer sentiment is the highlight on the US economic calendar Friday
• Highlights: Senate reveals Republican tax cut proposal
• NFIB now says it supports House tax bill
• Crude oil futures settle at $57.17 per barrel
• House tax chairman wants to bump the tax on repatriated profits to 14% from 12%
• Theresa May ready to pay more in Brexit divorce - report
• Bundesbank President Weidman: Brexit will weaken London's financial mkt
• EU Official: No breakthough on Brexit bill talks
• Senate tax proposal removes state and local tax deductions
• US Treasury sells 30-year bonds 2.801% vs 2.805% WI bid
• SNB's Jordan says he sees franc as 'highly valued'
• Dollar moves lower on delay of corporate tax cut Senate proposal.
• The rumours were true: Senate tax bill to delay corporate tax cut until 2019
• European stocks take it on the chin. Yields push higher.
• No comments on monetary policy from SNB's Jordan
• House to vote on tax bill next week
• Rumours doing the rounds that Saudi King Salman could step down
• ECB's Lane: The bar for another QE extension is higher
• ECB's Constancio: No decision has been made about buying more corp bonds
• US Sept wholesale trade sales +1.3% vs +0.9% expected
• Saudi Arabia orders its citizens out of Lebanon 'immediately'
• ECB's Mersch: Sees very timid signs of inflation pressures building up
• The Nikkei chart tells the story today
• US initial jobless claims 239K vs. 232K estimate
• Canada Sept new housing price index +0.2% m/m vs +0.2% expected
• The JPY is the strongest as NA traders enter. The NZD is the weakest.
• ForexLive morning news wrap: USD slides and euro feels some love again

In other markets a snapshot near the end of the NY session shows:

• Spot gold up $4.50 or 0.35% at $1285.88 . A lower dollar helped to support the precious metal.
• WTI crude oil futures are trading up $0.27 or 0.49% at $57.09. Saudi shakeup continues to exert a positive/bullish influence.
• US auctioned $15B of 30 year bonds at 2.801%. The bid to cover was tepid at 2.23x vs. the last auction at 2.53x. The yield curve actually steepened a bit today (which is something new). 2 year 1.629%, -1.6 basis points. 5-year 2.003%, -0.5 basis points. 10 year 2.329%, -0.5 basis points. 30 year 2.806%, +1.4 basis
• The US stock market ended the session down but well off lows.

The market was focused on the Senate tax bill today. The rumblings and rumors earlier in the day, were that the corporate tax cut would be delayed for a year (it was). That did not sit well with investors (at least at first). Given sharp losses in European stocks (higher yields and a stronger EUR helped to contribute to selling there), the path of least resistance for US stocks was lower too.

As the day progressed, the S&P moved to a low of 2566.33, down about -28 points. The Nasdaq fell over -100 points to 6687.28.

As has happened so many times before, the tumbles in the stock market have had their moments of fear, but buyers eventually enter (technical levels may come in play),and the major indices rebound. Looking at the Nasdaq index chart below, the index reached the 100 hour MA, stalled and bounced.

So what was the impact in the USD?

The USD initial response was a fall in the greenback, but then rebounded in conjunction with the correction in the stocks.

• The USDJPY fell to its 200 bar MA on the 4-hour chart at 113.06. It bounced off that MA level on the stock selling. The pair now trades at 113.385. Into the new day, the 200 bar MA is now even more important as a support level now. On the topside, earlier in the day today, the 100 bar MA on the same 4-hour chart stalled the rally at 113.63. That will be a level to eye on the topside if the price is going back higher.
• The EURUSD moved up toward the key 1.1661 resistance target as stocks tumbled. That was the swing low from August 2017 and the 38.2% of the move down from the October 26th swing high. The EURUSD price stalled at 1.1654 - 7 pips ahead of that dual resistance target. We currently trade back down at 1.1641. The 1.1661 and 1.1668 (swing low from October 6th) remain key topside resistance in the new trading day. On the downside, the price in the NY morning session based against the 200 hour MA at 1.1621. That will be a level to get below if the bears are to take more control.
• The GBPUSD rose to the 100 bar MA on the 4-hour chart at 1.31665 on the slump. The price stalled at 1.31646 - just ahead of that key level. Since then, the price has rotated back down to 1.3147 currently. The 100 bar MA has now stalled the rally 3 times on three separate tests this week, and that makes the level a key level going forward. On the downside, the 100 day MA comes in at 1.31026. The price has traded above and below that level this week - indicative of uncertainty by traders as to the next move. The price action today keeps that uncertainty in play.

So stocks wagged the FX dog today, but the typical rebound in the stocks also happened to correspond with some key technical levels in the USD. That's ok. I like that.

Below is a snapshot of the strongest and weakest

To the Asian friends of FXL have a great weekend. For the NA traders, Adam and I will be back again tomorrow before Adam head off to London for the Finance Magnates Summit (CLICK HERE for info).