The GBP is the strongest and the USD is the weakest as NA traders enter for the day

Technical Analysis

Author: Greg Michalowski | forex

Gold is up. Yields are up.  Rotation out of high value tech continues.

As North American traders enter for the day, the GBP is the strongest of the majors while the USD is the weakest.  The dollars decline is in contrast to the higher rates seen in the debt market today.  Oil prices are also higher.  US stocks are looking lower in premarket trading with the rotation out of the more expensive high flying stocks as markets ponder readjusting to the higher rates.  The GBPUSD is the biggest mover (0.66% higher).  The pair has been up over the last 6 hourly bars after testing its 200 hour moving average at the lows (at 1.38413 currently) and surging back through its 100 hour moving average (at 1.38886). The price has extended above the cycle high from Tuesday at 1.39508 to a high at 1.3969.  The 1.4000 level is more in sight now.  

Gold is up. Yields are up.  Rotation out of high value tech continues.
The GBP pairs are leading the way with the GBPUSD trading up 91 pips on the day with an oversize 109 pip trading range so far today.  The GBPJPY, GBPCHF and EURGBP are also near their 22 day average trading ranges for the day with the NY session still ahead.   The other pairs vs the USD are near extreme levels as traders await US data at the bottom of the hour (housing starts, initial jobless claims, import/export price indices and the Philly Fed). 

The ranges and changes for the major currency pairs
In other markets:
  • Bitcoin traded down about $1050 or -2.0% at $51,364. The high price reached $52,549.99. The low price extended to $50,875
  • Spot gold is trading up $7.53 or 0.42% to $1783.53. Yesterday Spot gold fell around $18 as the US dollar rose. With the US dollar falling today, those gains are being reversed to some extent
  • Spot silver is trading down $0.16 or -0.61% at $27.21
  • WTI crude oil futures are trading up $0.44 or 0.72% at $61.58. The arctic chill in the US and the private inventory data near the close yesterday showed a larger than expected draw of 5.8 million barrels (vs. expectations of 2.1 million).
In the premarket for US stocks, the futures are implying lower levels for each of the major indices. The rotation out of the higher value stocks as the NASDAQ index underperforms. However, the Dow industrial average is also negative today after 2 days of record closes.
  • S&P index down -14 points after dipping a modest -1.26 points yesterday
  • Dow industrial average -99 points after gaining 90.27 points in trading yesterday
  • NASDAQ index -92 points after falling -82 points in trading yesterday
In the European equity markets the major indices are trading mostly lower with the exception being the German DAX which is a modest 0.2% gain.  near unchanged levels
  • German DAX, +0.20%
  • France's CAC, -0.2%
  • UK's FTSE 100, - 53% 
  • Spain's Ibex, -0.1%
  • Italy's FTSE MIB, -0.4 percent
In the US debt market, yields are reversing the declines from yesterday which saw the 30 year yield move down -4.2 basis points and the 10 year yield was down -3.2 basis points despite stronger growth in retail sales and PPI inflation. Today the 30 year is trading up 3.7 basis points while the 10 year is up 2.9 basis points (just below the 1.300% level). The yield curve is re-steepening with the 2 – 10 year spread up to 118.81 basis points vs. 116.74 basis points the close yesterday.

US yields are higher
In the European debt market, the benchmark 10 year yields for each respective country is trading higher led by the UK with a 4.7 basis point gain

European yields are mostly higher


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