Session Wraps - Major Forex Headlines wrapped up by trading session

GMTAuthor: Greg Michalowski

Forex news for NY trading on September 18, 2018

Intro Paragraph Text Here.

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.

In the European and US stock markets, the European stocks ended higher (with the exception of the UK FTSE - down a fraction).  The US indices rebounded after yesterday's falls.  

The German Dax and the Italian see MIB were the biggest gainers at 0.51% and 0.55% respectively.   

In the US, the NASDAQ rose 0.76%, rebounding from its -1.43% decline on Monday.  The Dow and S&P also had solid gains but all three indices closed off their session highs.  

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. 
Good fortune with your trading. 

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GMTAuthor: Justin Low

Forex news from the European trading session - 18 September 2018

Headlines:

Markets:

  • AUD leads, JPY lags on the day
  • European equities mostly higher, FTSE MIB only laggard
  • Gold down 0.08% to $1,200.48
  • WTI up 1.41% to $69.88
  • US 10-year yields up 0.9 bps to 2.996%
  • Bitcoin up 0.66% to $6,258


The trading landscape today is dominated by the fact that US finally decided to announce the additional $200 billion worth of tariffs on Chinese goods. The headline hit after US markets were closed and risk assets saw a dip in Asian trading. But soon enough, market sentiment recovered and risk trades started becoming the hot pick of the bunch with markets doing what they do best when it comes to the trade rhetoric in 2018, and that is to fade it.

The start of European trading saw risk assets extend their gains as Treasury yields inched higher alongside a jump up in S&P 500 futures. AUD/USD pushed to a high of 0.7221 from around 0.7190 levels with NZD/USD showing similar poise touching a high just above the 0.6600 handle from around 0.6580 levels.

The dollar and the yen were the two main laggards in all of this, especially the latter, as a combination of higher Treasury yields and US equity futures saw USD/JPY touch two-month highs of 112.28. Although the greenback strengthened against the yen, it fell against the rest of the major bloc with the dollar index threatening a break below the 100-day MA again.

During the time, EUR/USD traded higher from around 1.1690 to touch a high of 1.1718 while GBP/USD also touched a high of 1.3171 from around 1.3150 levels.

Although widely expected, China's announcement to retaliate in kind against the US gave risk assets a reality check and markets corrected some of its earlier gains. The yen and dollar were bid on the back of the headline although China offered no details on its retaliatory measures.

USD/JPY fell from 112.25 to just under 112.00 before settling between a 111.90 and 112.10 for the rest of the session. EUR/USD pared earlier gains and fell from 1.1710 to around 1.1680 where it continues to trade since. The pound was among the key losers in all of this - weighed down by the fact that there won't be any substantial progress from Brexit talks in Salzburg this week as well - with GBP/USD falling from 1.3160 to a low of 1.3119 before recovering a little now to 1.3130 levels.

Towards the end of the session, oil prices saw a spike as Saudi Arabia is said to be comfortable with Brent above the $80 handle. It's not a new headline per se as they have made similar comments in the past, but it was enough of a reason for oil traders to take price higher. Both Brent and WTI are up by more than 1% on the day now and that helped USD/CAD to a low of 1.3013 earlier, testing the 100-hour MA before bouncing a little thereafter.

In the midst of all of this, the aussie and kiwi held onto their early morning gains and continue to lead the rest of the pack ahead of US trading. AUD/USD settled around 0.7190 to 0.7210 while NZD/USD has sat between 0.6580 to 0.6595 levels after slipping a little of their highs following the China retaliation headline.

The rest of the market are also showing decent signs of improved risk sentiment with European equities and US equity futures trading a little higher while Treasury yields are holding up with 10-year yields still pivoting around the 3% handle.


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GMTAuthor: Eamonn Sheridan

Forex and Bitcoin news for Asia trading Tuesday 18 September 2018

US President Trump announced additional tariffs on $200B of Chinese goods. He added also that if china retaliated he'd impose tariffs on a further 267bn of imports.

'Risk' came under pressure with AUD one the bigger losers (not a huge drop).

As the session progressed and China opened we did not see much sign of any immediate retaliation from China. We even got reports of quite restrained comments from China's commerce minister. The response helped risk to climb back, AUD fully reversed its gains and popped its overnight high briefly. Now, on these commerce minister comments, after they were reported it as noted they were from Monday, prior to the Trump tariff announcement. It may have been helpful to have that made clear up front, but no. Welcome to FX. Mustn't grumble.



Prior to all this happening, while we were waiting on something on tariffs we had some fun and games from New Zealand. NZ PM Ardern said she'd seen a preview of the coming GDP figures and was 'pleased' with them. NZD/USD was taken higher on the comment.

And then a spokesman for the Prime Minister said she was mistaken, she had not seen the GDP result. Ditto on the Welcome to FX, mustn't grumble. NZD gave back its pop as the China tariff news hit and then recovered. Its had a roller coaster ride, admittedly in not too big a range.

CAD was a bit of a mover also, USD/CAD higher on the China news, then it retraced too. We did have some news that Freeland was to head back to Washington this week for more Nafta negotiation. Of course she is. This is not going to finish any time soon, Deadline is apparently October 1.

EUR,GBP moved to a smaller degree, each down on China tariffs, each back up again .

USD/JPY fell early but as the Tokyo morning progressed it recovered back towards 112. There was little idiosyncratic yen news, a few comments from government ministers. The BOJ make their policy statement tomorrow so we can expect a few more jitters ahead of that.

Still to come:


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GMTAuthor: Greg Michalowski

1

Forex news for NY trading on September 17, 2018.

In other markets:

  • Gold took it's clues from the falling dollar. If the dollar falls, gold tends to go higher. It rose $7.46 or 0.63% at $1200.96. The high reached $1205.05. The low extended to $1192.87
  • WTI crude oil fell -$0.25 or -0.36% at $68.74. The high reached $69.72. The low extended to $68.53
  • Bitcoin on Coinbase fell $273 to $6228.01. The high reached up to $6529.75. The low extended to $6218.70.  Looking at the hourly chart below, the price fell below the 200 hour moving average in the NY session and then below a lower trend line connecting recent lows. The underside of that trend line was tested on a corrective move. After holding the price moved back lower and trades near the lows for the day.  The next targets come in the September 11 at $6176, followed by the September 8 low at $6116.  Bears are in control below the 200 hour MA at $6398.45.


In the European and US stock markets, the European stocks ended mixed, while the US indices fell - led by the Nasdaq index.  The German Dax was the loser in Europe and the Italian see MIB rose 1.08% and was the strongest.   In the US, the NASDAQ fell -1.43% as traders rotated out of the tech sector concerns about US and China trade war.   The below chart shows how the US indices closed near the low levels for the day. 



In the US debt market, yields were higher earlier. The 10 year traded to a 6 week high yield in the in the NY morning session at 3.02%. However, by the close, the 10 year was marginally lower. The 2-10 year spread was also wider earlier but is ending lower near the day close (at 21.43 bps). 

Italian 10 year yields tumbled on positive budget news. The other 10 year benchmarks were mostly higher, but only by a fraction of a basis point (sans the Portugal 10 year). 

In the forex market, the trend was more to the downside for the USD (although the CAD eked out the USD in our end of day rank). The GBP was the strongest on Brexit deal hopes. 

Below is a ranking based on the %changes of the major pairs vs each other.

The main catalyst was once again trade concerns.  The dollar was weakish coming into the day but extended the fall mostly after comments from White House economic adviser Kudlow and Pres. Trump himself, that additional tariffs against China were forthcoming. Trump went so far as to say they would be announced after the close (as of now, that announcement has not been made).  Other economic news at the start of the NY session included a weaker than expected empire manufacturing index which also did not help reverse the lower dollar trend into the trading day. 

Running lower with the USD was the CAD.  Today, there were no formal NAFTA meetings, but Trudeau said that he "will stand up for dairy farmers at NAFTA talks" and Freeland wasn't all that positive saying she "will go to Washington this week, but there was no formal date for talks yet".  She did say she had a long talk with the dairy industry representatives on Friday, perhaps laying the pipe for some compromise offer to the US.  Whether Trump accepts it is anyone's guess. 

Some key technical levels to be aware into the new day:

  • The GBPUSD stalled just ahead of the 100 day MA at 1.3169. The MA is at 1.3166 in the new trading day. Key bullish above/Bearish below level in the new trading day
  • The USDCAD moved up to test its 100 day MA at 1.3043 into the close and stalled. That MA will also be a barometer for bulls/bears in the new day.
  • The EURUSD moved above it's 100 day MA at 1.16678 after the weaker empire manufacturing data and stayed above (rising to a high of 1.16975.  The MA will be support (and risk for longs now). The 1.1700 is a natural level to get to and through. 
  • The USDJPY has a cluster of support at the 111.71-76 area (see post here). That is where the move lower stalled.  A break below is more bearish.  So far the dip buyers area trying to stall the fall.
Wishing you all good fortune in your trading. 

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