Forex news for trading on May 16, 2017
- Nasdaq gains. S&P and Dow down marginally.
- WH says intelligence information was from Israel
- What's scarier: That the reports are true, or untrue?
- Crude oil futures settle at $48.66 /bbl
- USDCHF and EURUSD hits new price extremes.
- AUD/USD will fall to 0.7000 because of China - BAML
- EUR/USD: 2 caveats after 1.10 break; what's next - SocGen
- ECB's Coeure: Rise in long-term yields hasn't affected ECB policy
- The rich list is out: 2016 was a tough year for hedge fund managers
- ECB's Nowotny: The longer ECB stimulus used, the less additional impact
- Libya oil production falls back below 800k bpd
- European equities end the session mixed. UK FTSE closes above 7500 for 1st time ever.
- Atlanta Fed Q2 GDPNow up to 4.1% from 3.6% last
- New Zealand GlobalDairyTrade index +3.2 vs +3.6% prior
- The collapse of retail will be faster and harsher than almost anyone expects
- April US industrial production +1.0% vs +0.4% expected
- Top US statisticians warn that inflation has been chronically overstated
- US April housing starts 1172K vs 1260K expected
- The strongest and weakest currencies as NA traders enter for the day
- Smets says ECB must prepare markets before end-2017
- Trump out on Twitter: I have the absolute right to share information with Russia
In other markets today:
- US stocks mixed. Nasdaq up 0.33%. S&P down -0.07%. Dow down -0.01%
- US bond yields are lower. 2 year 1.2987%, unchanged. 5 year 1.8467%, -1.49 bps. 10 year 2.323%, -1.9 bps. 30 year 2.989%, -1.6 bps
- Spot gold +$6.40 to $1237.09. Low $1230. 30. High $1239.89.
- WTI crude oil -$0.29 to $48.56. Low $48.50. High $49.38.
The US dollar started the US session lower but mixed against the major currency pairs. In the NY session, however, the declines in the greenback accelerated and the pair is ending the session as the weakest currency in trading today. The greenback fell against all the major currency pairs with most of the losses coming against the CHF (-1.11%), EUR (-1.02%) and JPY (-0.67%). The declines against the other pairs were more modest with the USDCAD down -0.29%, the AUDUSD down -0.23%, the GBPUSD down -0.19% and the NZDUSD down -0.06%.
The greenback was influenced by weaker US housing starts and building permits. Housing starts were expected to come in at an annualized sales pace of 1260K. The pace came in at at a much weaker 1172K. The building permits were also lower than expectations at 1229K vs estimates of 1270K.
President Trump and his staff spent the day reacting to the latest blunder. This one was focused on the President's telling of classified information to Russian delegates last week. Last night there were denials from the WH. This morning, the President pulled rank, by saying the information was shared with the Russians, but as President, he determines what is classified and can also de-classify if he so chooses. Recall that last week, the President met with the Russian delegates and their press representatives, but banned the US press. Was the dollar impacted? I guess it couldn't help.
Interest rates were also back lower with the 10 year down about -2 bps. Stocks were mixed with the Nasdaq up 0.33%, but the S&P (-0.07%) and Dow (-0.01%) were down by a fraction.
Technically the moves were lower but there was some slowing of the trend near low levels.
The USDJPY peaked against the 100 hour MA twice in the Asian and then London sessions. The price fell below the 200 hour MA and a trend line at the 113.39 area in the late NY morning and did not stop until reaching within a few pips of the 100 day MA (at 112.919). The corrective rebound stalled below the broken 200 hour MA, and a second fall to the 100 day MA stalled the pair once again. Needless to say, into the new trading day, the 100 day MA at 112.91 remains a key level to stay above for the buyers and a level to get below for the bears. ON the topside, the 200 hour MA at 113.39 will be eyed for additional technical clues.
The EURUSD broke above trend line resistance on the daily chart at the 1.0985 level early in the Asian session and started a trend move higher into the NY session. The worse than expected housing data helped push the price above the London morning high at 1.1064 and toward the 1.1100 resistance target (see post). The price stalled at the 1.1088 level - ahead of that targeted level - but the decline also stalled at the 1.1064 London morning high. Toward the end of NY session the push to the 1.1100 stalled at 1.10965...Close but no cigar. We are trading at 1.1083 at the close. In the new day, the 1.1064 is close support and a break of the 1.1100 will next target 1.1128 - the 61.8% of the move down from the May 2016 high. The bulls charged like real bull higher today. Can they take the pair even higher in the new day? Let's say, the bears have to show they can take more control. Below 1.1060 would be the minimum I would like to see in the new day.
The USDCAD fell when oil fell today. The USDCAD fell -0.29% into the last hour of trading. That typically is not the way the USDCAD is supposed to react to oil. However, the pair did find support at a lower trend line AND the 38.2% of the move up from the April 2017 low at 1.3575 area. A larger build in oil inventory data at the end of the NY session, finally has the USDCAD reacting to oil and the pair is trading back above 1.3600 into the new trading day (see post here about the USDCAD).
The GBPUSD remains in a range but the pair did find support near the low extreme area at 1.2860. That was bullish. Not so bullish is the inability to remain above the 200 hour MA at 1.29219. The price extended above the hourly moving averages twice today, and both times the breaks failed (click here for the story of the sideways GBPUSD).
The USDCHF was the strongest currency today and in the process, it fell below trend line support and the low from earlier in the month (at 0.9855-64). Stay below that area in the new day and a retest of the 2017 low at 0.98128 will be targeted.
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Below are the % changes of the major currencies vs. each other. The CHF is the strongest, while the USD is the weakest.
