Forex news for NY trading on July 31, 2018

In other markets, the snapshot shows:

  • Spot gold is up $2.40 or 0.2%
  • WTI crude oil is down -$1.40 or -2.0%

In the US stock market today:

  • Dow rose 0.43%
  • S&P rose 0.49%
  • Nasdaq rose 0.55%

European shares close also higher:

  • German Dax rose 0.06%
  • France's CAC rose 0.37%
  • UK FTSE rose 0.62%
  • Spain's Ibex rose 0.17%
  • Italy's FTSE MIB rose 1.25%

In the US debt market today:

  • 2 year 2.674%, up 0.5 bps
  • 10 year 2.962%, down -1.3 bps
  • 30 year 3.082%, down -2.3 bps

The dollar erased earlier losses against the EUR, GBP, and CHF in the NY session. The USDJPY was better bid for all of the day after the BOJ chose to stick to ultra easy money policy, but would widen the allowable trading range for the 10 year note. The USDCAD bucked the higher USD trend, after May GDP came in better than expectations at 0.5% vs 0.2%. Producer prices were also higher.

Other data in the US was mixed:

  • June PCE came in a touch light at 1.9% vs 2.0% expected
  • 2Q employment cost index rose 0.6% vs 0.7% expected
  • Case Schiller home prices rose a modest 0.2% (as expected).
  • Chicago PMI beat expectations at 65.5 vs 62.0 expected
  • Consumer confidence was better than expectations.

The FOMC started their 2 day meeting today. They are not expected to change rates at the current meeting but are expected to target rate rises in September and December. The decision will be made at 2 PM ET tomorrow.

Apple earnings after the close beat expectations. The stock is up 2.5% in after hours trading. US tech stocks did recover modestly today with the Nasdaq up 0.55% Bank stocks did not do well as the US yields fell today - mainly in reaction to the fall in the Japan yields after the BOJ decision.

From a technical perspective:

The EURUSD moved to test the 2 week swing highs in the 1.7429-49 area. There have been 5 separate highs in that area going back to July 17. Today makes it six. The high stalled at 1.17455. The falll down took the price to a cluster of support at the 1.16825-1.16874 area (the low reached 1.16888). The 100 bar MA on the 4-hour chart, the 100 and 200 hour MA and the 50% of the move up from Friday low all come in that confined area. In the new day, traders will be eyeing that level for clues. So far, the buyers have been able to stall the fall, but on a break, the bias will turn more bearish.

The USDJPY move above its 200 hour MA in the London morning session (at 111.308 now) and stayed above that level. The NY session saw a continuation of the move higher with the pair peaking at 111.95. The 50% of the move down from the July 19 high comes in at 111.875 and the pair is trading right around that midpoint level at the close. It will be the barometer for bulls and bears in the new trading day.

The Bank of England will be the third central bank to report this week. They are expected to tighten by 0.25% on Thursday. In trading today, the price moved up to a topside channel trend line at 1.3168. The high reached 1.3172. The break above that trend line failed. The price followed the USD move higher (with the GBPUSD moving lower). Support came in at a lower trend line and 200 hour MA. However, right around the London 4 PM fixing, those levels were broken (at 1.3114-20) and the price scooted to new session lows at 1.3088. The rest of the day saw a modest rise back toward the 100 hour MA at 1.3133 and the close from yesterday at 1.31283. In the new day, the 200 hour MA is at 1.31185. The 100 hour MA is at 1.3133. That is the neutral zone. Move above is more bullish. Move below is more bearish.

Wishing you all a great day, evening, night. See you all tomorrow.