Forex news for NY trading on April 1, 2020
- Deficit discipline is dead
- Stocks heading into the last hour of trading...Buckle up your seat belt
- WTI crude oil futures settle at $20.31
- Morneau: Wage subsidy at $71B is largest program in Canadian history
- Rosengren says it may be helpful to broaden Fed's ability to buy assets
- Trump to meet with oil company CEOs about helping industry - report
- Florida issues stay-at-home order
- New Jersey cases accelerate, Pennsylvania issues stay at home order
- CDC US coronavirus count 186,101 vs 163,539 yesterday
- New York state coronavirus cases hit 83,712 from 75,795 yesterday
- Italy coronavirus cases 4782 vs 4053 yesterday
- European shares end the session lower
- Canada coronavirus cases take a big jump to 9017 from 7708 yesterday
- US intelligence says China under-reported virus cases and deaths - report
- US weekly EIA crude oil inventories +13833K vs +3300K expected
- Not even the greatest hedge fund in history dodged the rout in March
- US construction spending for February -1.3% vs 0.6% estimate
- US March ISM manufacturing index 49.1 vs 45.0 expected
- The US small business lending program is a free-money giveaway that's going to run out in days
- US March final Markit manufacturing PMI 48.5 vs 48.0 expected
- Mnuchin on CNBC: Small business program up and running tomorrow
- UK government says 2352 have died vs 1789 yesterday
- Former shale star Whiting Petroleum files for bankruptcy
- US March ADP employment change -27K vs -150K expected
- The USD is the strongest and the CAD is the weakest as the NA traders enter for the day
It's April Fools Day which customarily is an invitation to some good natured humor. However, with the coronavirus pandemic, and even the White House warning to buckle up for what may ultimately be a 100K to 240K death toll, it is hard to find the humor. Cases and deaths are a long way from hitting the apex, and the markets showed the anxiety today.
Stocks certainly were not in the mood on the first day of the month/quarter. Each of the major indices fell by -4.4%. The Russell 2000 index tumbled -7.19%. Ouch. It is down -35.73% on the year as investors exit small caps for obvious reasons.
US yields also fell with the 10 and 30 year leading the way with declines of -5.8 and -6.2 basis points respectively. The yield curve flattened with the 2-10 year spread declining to 37.38 from 42.40 basis points.
Gold had a volatile day, with a low at $1569.07 and a high at $1600.75. The as metal is trading at around $1589 currently which is closer to the high, but if gold is able to find it's bullish legs again, it will need to get and stay above the $1600 level.
Crude oil inventory data had a surprise build to the upside (+13833K) but it was precluded by the private API data (+10485K) yesterday. As a result prices did bottom at $19.90. Later in the day they were helped by the announcement that Pres. Trump was to meet with US oil executives to discuss ways to boost the price of crude oil domestically, with tariffs on Saudi Arabia and oil as a potential solution.
In the forex all that intermarket activity, led to a risk off flight into the JPY and the USD. They were the strongest of the majors. The CAD and AUD were the weakest.
A look at some of the individual pairs showed:
EURUSD: The EURUSD moved lower but found support near the pairs 200 hour moving average. Traders tried to triggered stops below that moving average level at the 1.0910 level, with the low price reaching 1.0902, but when momentum could not be sustained, the price rebounded over the last 3 hours of trading. We are currently trading at 1.0964 going into the 5 PM close. In the new day if the price is to move lower getting and staying below the 200 hour moving average currently at 1.0913 (and moving higher) will be eyed. On the topside, a downward sloping trendline currently comes in at 1.0989. A move above that would be the minimum target with the 100 hour moving average at 1.10219 and the 100 day moving average at 1.10422 other upside levels to get back above.
USDJPY: The USDJPY is getting scrunched between at topside trend line at 107.254 (and moving lower) and a lower trend line at 106.87 (and moving lower). Each trendline on the hourly chart has been tested 4 or so times. On a break either way, there should be more momentum in the direction of the break. Be aware.
GBPUSD: The GBPUSD remains above its 100 hour moving average 1.23502. A trendline on the hourly chart connecting lows from March 27 and March 31 also come in near that level. If the price is to probe further to the downside, getting and staying below that level would be needed. On the topside the 50% retracement of the move down from the December 2019 hi to the March 2020 low comes in at 1.24611. Above that, and the high from yesterday at 1.24717 and the high from last Friday at 1.24840 would be other targets to get to and through.
USDCAD: The USDCAD moved higher today, but that is not to say, there was some weakness intraday. What we did learn intraday, however, is at the 100 hour moving average at 1.41196 attracted buyers. On the topside in the North American session, the 200 hour MA currently at 1.42434, attracted sellers. We currently trade between those levels of 1.4172. In the new trading day traders will be looking for a push through those moving average extremes for the next bias clues.
NZDUSD: Around the London fixing time, the AUDUSD and NZDUSD took off to the upside in what seemed to be fixing flows in an illiquid market. For the NZDUSD, the price moved right up to its 100 hour moving average currently at 0.59736 and backed off. We currently trade at 0.59183. On the downside, the rising 200 hour MA is at 0.58755. So like the USDCAD, the pair trades between those goal posts. In the new day it will take a momentum move above the 100 hour MA at 0.59736, or a momentum move below the lower 200 hour MA at 0.58755 to encourage more momentum in the direction of the break. While in between, it would not be unusual for the pair to ping-pong between the two moving average levels.
