Forex news for trading on July 5, 2017

A snapshot of other markets at the end of the trading day shows:

  • US stocks have mixed results: Dow was down -1.1 points ro -0.1%. S&P is up 3.53 points or +0.15%. Nasdaq is up 40.795 points or +0.67%.
  • US yields are lower. 2 year 1.406%, unchanged. 5 year 1.915%, -1.6 bp. 10 year 2.324%, -2.5 bp. 30 year 2.847%, -2 bp
  • Spot gold is trading at 1226.47, +$3.20 or +0.26%
  • WTI crude tumble -$1.54 or -3.29% to $45.53. Although lower it is up from a late day fall that just saw the price move quickly to $44.50 before rebounding back higher to $45.50.

The forex market was fairly quiet in trading today, with most of the currency pairs moving up and down. Looking at the chart below, the price of the major currency pairs against the USD traded above and below the unchanged level. The largest pip change was +21 pips for the USDCAD but it is ending the day a good amount off the highs.

Economic data was light in the NY session. Factory orders came out weaker than expectations at -0.8% vs -0.5% estimate, but some of the pieces were better (durable goods was revised to higher to -0.8% vs -1.0%, and ex the volatile transportation the data showed a 0.3% gain).

The market then waited for the FOMC meeting minutes which showed that:

  • Fed officials were divided over when to start balance sheet runoff
  • Fed members saw surprisingly low inflation as idiosyncratic and expected it to move back toward the target rate.
  • They repeated support for gradual interest rate hikes
  • They debated pros and cons of sustained unemployment undershoot

US stocks were little changed after the release.

Bond yields were little changed.
The US dollar moved lower then higher and back lower again.

Below is the % change of the major currencies vs each other. The CHF was the strongest but even so, the changes were small with the exception of the CADCHF (that old chestnut) that was the biggest mover on the day at 0.33%. The biggest % mover vs. the US dollar was the USDCAD that moved 0.26%. The 2nd biggest mover vs. the US was the USDCHF which moved lower by -0.08%

What are some of the technical levels to eye in the new trading day?

  • USDJPY. The price moved below a trend line support line at 113.06 and the natural support at 113.00 after the FOMC meeting minutes. The low came in at 113.93 (38.2% of the move up from the June 30 low). That area is a support. A topside trend line has been broken twice this week only to fail. That trend line comes in at 113.57 and moving higher (connects highs going back to June 9th). If the price moves above that level and the high for the day at 113.68, the price should start to eye the May high at 114.367.
  • EURUSD. The EURUSD is ending the day little changed with moves up, down and back up again into the close. Technically, the pair is ending above its 200 hour MA at 1.13347 level (trades at 1.1348). Stay above the 200 hour MA is more bullish. The 100 hour MA is at 1.1379 and that will be a patient level to try and short before the US employment report on Friday.
  • USDCHF. The CHF was the strongest currency but the USDCHF was will changed after an up and down trading day. The 200 hour MA comes in at 0.9632. The low after the FOMC meeting minutes stalled against the level at 0.9634. That is a level on the downside to eye, with a move below switching the buyers back to sellers.