Forex news for NY trading on October 9, 2018

In other markets as the trading day comes to a close:

  • Spot gold is up $1.60 or 0.13% at $1189.77
  • WTI crude oil is up $0.42 or 0.57% at $74.72. Hurricane Michael has shut down some Gulf of Mexico drilling rigs. Iran supply is also a concern ahead of the November Iran sanctions
  • Bitcoin on Coinbase trades down -$48 at $6575.08. The high reached $6624. the low $6552. Quiet day in the digital currency, but if exposed be on the lookout for a break and run.

In the US stock market today, major indices were mixed in an up and down session:

  • Nasdaq was up 2 points or 0.03%,
  • S&P was down -4 points or -0.14%
  • Dow was down -56 points or -0.21%

European shares were higher on the day. Below is the changes and ranges for the major indices today in % change terms:

In the US debt market today, the yields started the US session higher but turned negative, and is ending the session lower (the 2 year is unchanged). The yield curve also flattened (2-10 year) to 31.74 bps. That is down from 34.78 bp close yesterday.

Italiian 10 year notes had a wild up and down session. The first move was higher, but PM Conte tried to sooth the market's fears, and it worked. Buyers came in and pushed the yields back lower.

IN the forex market, the GBP is ending as the strongest. The USD is the weakest. The charts below show the % changes of the major currencies vs each other. PS at the start of the day, the day the JPY and USD were the strongest. and the EUR and GBP were the weakest. So there was a turn in the fortunes of a number of currencies today.

I can blame the dollars fall to a rotation lower in US yields. The recent run up in yields, the higher dollar, a correcting stock market, tariffs, and Fed tightening has traders worried about slower growth ahead. That idea seemed to scare traders into buying notes/bonds and forcing yields lower and with it the USD. Maybe markets just got a little too ahead of itself.

For the GBP - which helped contribute to the lower USD with the GBPUSD moving 0.43% higher - there was a headline that a Brexit agreement might come as early as early next week. Ireland's Coveney supported that idea. UK's Raab was a little more sanguine about the timing, but was hopeful for an agreement nevertheless.

The headlines sent the GBP sharply higher - led by the GBPUSD.

The GBPUSD based today at the 100 and 200 hour MA in the early NY session at the 1.3037 area. The headlines sent the GBPUSD price up to a high of 1.3150. In the process, the price moved back above its 100 day MA at 1.31009. That MA will not be a risk level for bulls. Stay above move bullish. Move below and the buyers will question the bullish bias again.

The EURGBP fell to the lowest level since June 21 and at the lows tested a lower trend line on the hourly chart at 0.8735. The price is closing at 0.8741, not far from the trend line level. In the new day, a move below (with momentum) will keep the bearish bias alive in the EURGBP pair.

The EURUSD moved to the lowest level since August 20th, but squeezed higher with the help of the weaker dollar and in sympathy with the GBPs rise. The move higher took the price to the 100 hour MA (blue line in the chart below at 1.14943) and a topside trend line at 1.1507. The high reached 1.1503. The price is trading below those levels at 1.1490 at the close. Stay below the 1.1493-1.1507 area keeps the bears in more control. Move above, and more shorts will cover.

In other news today: