Forexlive Americas FX news wrap: Quiet start to the week as big events loom ahead
Forex news for NY trading on December 9, 2019
- Major indices close just off session lows
- Some pretty hefty options expiries tomorrow
- What's on the schedule for tomorrow during the New York session
- WTI crude oil futures settle at $59.02
- Pres. Trump: We are doing well with China in trade deal
- Correction: White House/Dems DO NOT have a USMCA deal
- US auctions off $38 billion of 3 year notes at 1.632%
- Sources: China purchases 5 cargos of soybeans from the US
- Meanwhile Canada's Morneau moves to implement middle class tax cut
- Looks like we're on the cusp of a USMCA deal announcement
- Double bottom in the USDJPY on the hourly chart
- Former Fed chairman Paul Volcker dies at 92
- Canada October building permits -1.5% vs +2.8% expected
- Canada November housing starts 201.3K vs 215.0K expected
- The EUR is the strongest and the AUD is the weakest as the new trading week begins in North America
In other markets:
- Spot gold is up $0.73 or 0.05% $1460.90. The high reached $1465.48 while the low extended to $1458.78
- WTI crude oil futures fell $0.22 or -0.37% at $58.98. The high reached $59.25. The low extended to $58.23
The US stocks opened lower, drifted higher and move back down into the close. The major indices closed near low levels for the day with the NASDAQ index down the most at -0.4%. Below are the percentage high, low and close levels for the North American and European major indices. A number of the indices in Europe also closed near session lows.
In the US debt market today, the US treasury auctioned off $38 billion of 3 year notes without a hitch. That was the 1st auction of the major monthly refunding. The treasury will auction off 10 year notes tomorrow and 30 year notes on Thursday. Looking at the changes, the yields are mixed with the shorter end moving up marginally in the long run moving down marginally. The yield curve is reflected by the 2 – 10 spread narrow by about 1.5 basis points.
There was no major economic news coming out of the US today. That impacted trading activity as the market awaits key economic events later in the week including the FOMC decision on Wednesday, Christine Lagarde's first ECB decision (and presser) on Thursday (both US and ECB are expecting no change in policy), and the UK election on Thursday as well.
Ranking the strongest to the weakest currencies, the CHF is ending as the strongest, while the NZD is the weakest. The USD is in the middle with gains versus the AUD, NZD and JPY and declines vs the CHF, CAD, GBP and EUR.
Some technical levels to watch in the new trading day:
- EURUSD: The EURUSD trade between its 100 hour moving average above at 1.1079 and 200 hour moving average below at 1.10536. The current prices near the middle at 1.1066. The 100 day moving average is also between those 2 hourly moving averages at 1.10632. The 100 and 200 hour moving average will be the bookends of support resistance for the new trading day (they are getting closer together as well). A break either above the 100 hour moving average or below the 200 hour moving average should solicit more momentum in the direction of the break.
- GBPUSD: The UK election clock is ticking down and that helped to lead to up and down trading in the pound today. The high price did extend to the highest level since the March 31, 2019 trading week at 1.31801, but the price backed off and is settling near 1.3147.. The consolidation over the last few days has moved the 100 hour moving average up to 1.3113 (and moving higher). A move below that level will target the 1.3100 level which was the low price from Friday straight. A move above the 1.3167 level would take the price above the 50% retracement of the move down from the 2018 high price and should/could solicit more upside buying.
- USDJPY: The USDJPY had a down and up trading session with the low for the day stalling against the low from last week at 108.42. The high for the day also tested and held a technical level against its 100 hour moving average at 108.675. The 25 pip trading range is not a lot for the day. Traders will be looking for either a break above the 100 hour moving average at 108.675, or a break below the double bottom at 108.422.
- The CAD move higher today after falling sharply on Friday on the weaker employment data. The catalyst for the stronger loonie was they long chatter that the USMCA deal was on the final legs for approval, with a vote potentially in the US on December 18. Canada and Mexico also have to ratify the new details of the deal. For the USDCAD, the pair stalled at the day highs near its 200 hour moving average 1.32586. The fall ended up stalling near its 100 hour moving average and 100 day moving average at 1.32284. Those two levels will be the barometer for the next market move. Move below the 1.3228 level (and stay below) and the pair can continue to retrace the move higher after the employment. Move above the 200 hour moving average at 1.3258 will then target the 200 day moving average at 1.32774.
- NZDUSD: The NZDUSD it is trading at 0.6548 near the end of day. Below its the 100 hour moving average at 0.65414 (and rising) and the 200 day moving average at 0.65363. That area will be the barometer for the market in the new day. Stay above would be more bullish, move below and there could be more selling momentum.
- The AUDUSD stalled on the topside today rate against its 100 hour moving average currently at 0.68355. The inability to get above that level gaves sellers the go-ahead to rotated lower. We currently trade at 0.6822 near the close. On the downside the 200 hour moving average comes in at 0.68116, and the 100 day moving averages at 0.68078. Moves below each would increase the bearish bias.
Wishing you all good fortunate in your trading.