Major indices close up 1.2% or better
The major US indices are closing with provisional gains of 1.2% or better.
The numbers are showing
- The S&P index rose 41.12 points or 1.44% at 2888.71
For the week, despite the solid gains today, the major indices are ending the week with losses (but it could have been worse).
Trading consolidates in the AUDUSD
The AUDUSD has wandered up and down in trading today. The early move at the start of the session stalled at the 100 hour MA, the price moved through the high from yesterday to 0.6794, but stayed well below the highs for the week (at 0.6808 and 0.6817). The failure to extend above the high has now led to wander back toward the 100 and 200 hour MAs at 0.6770-73 area.
Tests end of July/early August swing levels.
The EURUSD is lower today. The GBPUSD is higher. Those pairs are moving in opposite direction to the USD. The algebra of that equation points to a lower EURGBP.
Moves away from 1.1100 level
Yesterday I spoke to the 1.1100-09 area (). Those levels were lows from April, May and July. The price moved below those levels at the end of July and early August on the way to the 2019 low at 1.10265 but recovered back to 1.12489.
Tests 100 bar MA on 4-hour chart as well
Drilling to the 5 minute chart below, the pair has not had much of a breather as it trended higher. So there is some 'trend day' tendencies traders should be aware of. A lower trend line on the 5 minute chart comes in at 1.2156. The high from yesterday is at 1.21497. Those are close risk levels for the pair should resistance hold in the 1.2170-84 area and the price start to rotate lower.
The USD is mixed
The GBP has squeezed higher and trades higher vs all the major currencies today. The CHF is the weakest as "risk on" fears disipate for today. Stocks are higher. Bond yields WERE higher but the yields have come back to unchanged levels. Gold it lower. The global recession is off for now at least. The USD is mixed with gains and losses scattered amongst the pairs (dollar higher vs EUR, JPY, CHF and NZD and lower vs GBP, CAD, AUD)
GBP/USD holds above 1.2150 as the pound is firmer on the day
The pair is now trading at fresh one-week highs after briefly touching 1.2161 in the past hour and is continuing to hold above 1.2150 for the time being.
USD/JPY rises to a session high of 106.43
The move higher comes amid an extra bid in the pound and I would argue that GBP/JPY is leading the move here. Of note, USD/JPY is now moving back up towards a potential test of the 38.2 retracement level @ 106.68, which stalled the secondary spike yesterday.
Gold starts to fall below the 100-hour moving average
Gold is down to its lows for the day as buyers are showing some exhaustion to the topside move in the past week. Of note, price is now back under the 100-hour MA (red line) after having moved close to the level twice yesterday.
EUR/USD falls to 1.1087, the lowest level since 2 August
It's not a massive move by any means but we are seeing the dollar firm across the board as EUR/USD slips back below 1.1100 to a fresh two-week low.
The pair is sitting in a near-term wedge at the moment
If you measure back to last week, price action has been sitting in only a 200 pips range between 71.00 and 73.00 for the most part. That comes despite the spike we saw in the yen at the start of European trading yesterday.
Cable climbs back above 1.2100 to a session high of 1.2122
Buyers have seized back near-term control on the day upon breaking above the 200-hour MA (blue line) but the real test now for a further upside break will be the trendline resistance @ 1.2128 as well as the 23.6 retracement level @ 1.2134.
Sellers are looking to chew through bids at the figure level
The euro moved lower in overnight trading after ECB governing council member Olli Rehn suggested that at its September monetary policy meeting decision.
What happened technically?
The EURAUD is the biggest mover today, falling by 0.88%. What happened technically?
Looking at the hourly chart above, the pair on Tuesday moved into a swing area going back to August 2. The price rebounded on Wednesday, but fell back below the 100 and 200 hour MA by the close.
AUD overtakes the GBP and EUR runs by a string of currencies
As European traders look toward the exit, the AUD and the GBP switched spots as the strongest currency, while the EUR raced past the CAD, USD, NZD, CHF and JPY to become the weakest currency on the day.
Also approaching recent swing lows and the low for the year.
The EURJPY has nearly completed the up and down lap in the pair him. The earlier low for the day reached 117.75. The low just reached 117.766.
Nasdaq trades near lows again. GE getting hammered.
The Nasdaq moved back down to test the lows for the day (actually made a new low at 7743.637), but is seeing a little bounce. The lows from August 7 at 0.7702 and the August 5 low at 7662.90 are targets on more weakness.