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.