Forex news for NY trading on September 18, 2018
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- Oil - private inventory data shows a surprise build in headline stock
- Most crypto exchanges aren't doing enough to prevent manipulation, New York AG says
- Trump: "We just started" China trade tariffs policy
- Crude oil futures settle at $69.85
- Barnier: We are now on home straight in Brexit negotiations
- Now the Fed will have to grapple with the tariff question
- Canada's Freeland: No NAFTA better than a bad deal for Canada
- Bitcoin corrects up to 200 hour MA today. Seller lean and increase the MAs importance.
- Trump: We cannot let China take advantage of us, may make a deal at some point
- European major indices close mostly higher
- New Zealand GDT price index -1.3%
- EU parliament's Weber: Recognises UK May's Chequers plan as a step forward
- Long-term bottom in cable? Here's someone who thinks so
- US 10 and 30 year yields hits 4-month high
- NAHB housing market index for September 67 vs 66 expected
- China considering sending lower level official to US for trade talks
- China says new tariffs on US goods will be effective at 1201 local hours on September 24
- Trump tweeting about China. Says US farmers are loyal and won't be swayed.
- Canada Manufacturing sales for July 0.9% vs. 0.6% est.
- The AUD is the strongest. The JPY is the weakest.
In other markets:
- Gold gave back some of the gains from yesterday. The spot is trading down $-2.88 or -0.24% at $1198.59
- WTI crude oil rebounded in trading today on the back of reports that Saudi Arabia is happy with Brent being up near $80. Brent is trading at $79.06, up $1.01 or 1.32%. US WTI crude is trading up $.76 or 1.10% at $69.68. The private inventory data showed a surprise build in headline stock. The DOE will release their inventory data tomorrow at 10:30 AM ET
- Bitcoin on Coinbase is trading $104 at $6320. The high price today reached $6384, that was just short of its 200 hour moving average at $6393.98. Technically, that stalled against the 200 hour moving average basis that moving averages importance going forward. Stay below is more bearish. Move above and sellers are likely to turn more bullish (see chart below). The lows from September are targets at $6116 to $6191.
The chart below shows the % changes (and high low ranges) for the major stock indices:
In the US debt market, yields moved sharply higher with the 10 and 30 year traded to new 4-month highs. The 2-10 year spread was also wider today. It rose by 4.2 basis points to 25.03.
Italian 10 year yields continued its fall on positive budget news. The other 10 year benchmarks were higher.
In the forex market, the USD was mixed with gains vs the JPY and CHF and the largest declines vs the CAD, AUD and NZD. The EUR and GBP was little changed in an up and down day.
The strongest currency was the AUD. The weakest was the JPY as there was a flight into risk.
Below is a ranking based on the % changes of the major pairs vs each other.
The economic calendar had only the NAHB housing market index which remained unchanged and 67 on the month (and higher than the 66 expectations) and the lowest level in 2018. The data had little market impact.
In Canada, manufacturing sales came in stronger-than-expected 0.9% versus 0.6%. That they help to strengthen Canadian dollar. With the exception of the Australian dollar the loonie was the next strongest currency on the day.
The main story of the day was the enactment of US tariffs on $200B of China goods into the US and a retaliatory measure by China on $60B of US exports to China. Both will go into effect on September 24th. Although large numbers, it could have been worse. The US was thought to impose a 25% tariff. They lowered it to 10% instead with warnings that they could up it to 25% without cooperation. China was expected to slap tariffs on the $60B but the rate was expected to be 10% to 20%. They instead will only impose 5% to 10% tariffs on goods.
That "better than expected tariff news" helped stocks move higher, sent bond yields higher and led to the forex flows into the risk on AUD, NZD and CAD. The JPY meanwhile was sold.
Believe the price action or not, the main story was that the tariffs were not as bad as the market thought. The question going forward, however, will be.
"Will there ever be a point where this trade fight, turns to a more ugly trade war?"
Right now the US and China are just dancing with little slaps here and there.
Some technical levels in some of the major currency pairs:
- The EURUSD moved to 1.17239. That was good enough for the highest levels since August 28th but only 3 pips above the high from last week. The inability to move higher, turned the buyers to sellers and pushed the price toward the 100 day and 100 hour MA at 1.1664 area. The low did reach 1.1650 before rebounding to the MA area at the close. That 1.1664 level is the barometer for bulls and bears in the new trading day.
- The GBPUSD stalled on three separate tests of the 100 day MA at 1.3165 (it is at 1.3161 in the new day). The pair is closing at 1.3145. Stay below the 100 day MA keeps the sellers in plan. A move above and the sellers turn to buyers. ON the downside, a trend line at 1.3121 on the hourly chart and the 100 hour MA at 1.31044 (and rising) are target levels to get below if the sellers are to get more serious. The price has not traded below the 100 hour MA since September 5th.
- The USDJPY moved above the August 1 high at 112.146 (a risk level for longs) and trades at the highest level since July 20th going into the BOJ decision. Absent a move back below the 112.146 level, the buyers remain more in control for this pair.
- The USDCHF moved above a trend line currently at 0.9635 but stalled right at the 100 hour MA at 0.9654 (currently). Those are the technical levels that will help define the next move. Stay above 0.9635 is move bullish. Move below takes some of the bull, out of today's move higher.