Forex news for Asia-Pacific session on November 2nd, 2018

Markets:

  • Spot gold is down -$1.50 or -0.12% at $1231.97
  • WTI crude oil is down -$0.24 or -0.38% at $63.44
  • Nikkei 225 is +163 points or +0.75% at 21852
  • Shanghai composite is up 31 points or 1.21% at 2637
  • S&P futures are down -4.2 points
  • Dow futures are down 44 points
  • The CHF is the strongest. The GBP is the weakest.

The Asia-Pacific session suffered from three things today which made it really boring:

1. The forex market was on fire yesterday. Today started with a hangover.

Below is the % changes of the major currencies vs. each other at the close of the NY session yesterday.

The ranking of the strongest to the weakest accumulates the % changes of each change for each currency vs each other.

Note that number for the strongest currency (the NZD). It was 9.12%. That means all the % changes for the CHF vs the other majors, totals 9.12%.

The weakest currency was the USD at -8.23%. The dollar was down by an accumulated total of -8.23%

If you added up the pluses and minuses all the majors, it would come to 0.0% (the gains = the losses). I can tell you, those numbers are some big numbers relatively. There was a lot of action yesterday.

Now look at the % changes in the first 8 or so hours of trading today:

The CHF is the strongest with an accumulated % change vs the other majors of +0.56%. The GBP is the weakest with an accumulated % change of -0.86%. That spells a:

H-A-N-G-O-V-E-R

Not a lot of activity because the market is tired (we also were pinned against some key technical levels for some of the pairs).

2. It is Friday.

Friday's can be short of data and short on interest as risk increases over the weekend. So trader's are less excited to move the market. Remember as well, in the US elections are next week. Pres Trump is desperate to keep both Congressional houses. Anything can happen. So there is more weekend risk.

3. It's unemployment day in the US (you can add Canada).

Not only is it Friday, but later today, the US employment statistics (and Canada employment too) will be released. The expectations are for strong jobs (200K) and the highest YoY earnings since 2009. The dollar in the tops chart got hammered yesterday. Maybe....just maybe... the market is a bit scared of continuing the trend lower in the dollar since bottoming on Wednesday.

All that adds up to a pretty quiet session. The fireworks may start again at 8:30 AM ET/1230 GMT, but until then we may see more of the same.

Some technical thoughts for some of the major currency pairs:

  • The GBPUSD rallied strongly yesterday and stalled within about 5-6 pips of the 100 day MA at 1.3038. The 61.8% of the move down from October 12 is at 1.3042. That area is a ceiling that traders are leaning against now. A move above would trigger stops. On the downside, shorts want to see the 1.2976 broken. That is the 50% of the move down from the October 12 high.
  • The EURUSD peaked yesterday against the 38.2% of the move down from the October 16 high at 1.1423. The low in the Asian session today stalled at the 200 hour MA (EURUSD traders will eye 200 hour MA for support in the early trading). That was a key test and the bulls showed up. So the pair trades between the 38.2% at 1.1423 and the 200 hour MA below at 1.13901. Trades will look for the break above or below those levels after the jobs data (if it is a surprise).
  • The USDCAD will not only have the US jobs data to react to, but the Canada employment data as well at 8:30 AM ET/1230 GMT. For that pair, the price is trading between the 100 bar MA on the 4-hour chart below at 1.3065 and the 100 hour MA on the topside at 1.31182. A break out of that neutral area is what traders will look for.
  • The NZDUSD just jumped above the 200 day MA at 0.6628 after stalling at the level yesterday and through the early Asian session. Buyers are stepping up. The reason? Stocks are extending the gains as I look to exit.

That'll do it for me for the week. Thank you for your patience with me this week. "The Man" Eamonn will be back on Monday.

Good fortune with your trading.