Forexlive Americas FX news wrap: S&P new all time record. Dollar rallies after US/China truce

Forex news for NY trading on July 1, 2019

• New record close for the S&P index. Other indices close higher but well off session highs
• Video: What's next after the trade truce
• RBA likely to deliver second cut today - BAML
• July forex seasonals #3: Stock markets sizzle
• Reuters source: OPEC reappoints Secretary-General Barkindo for 3 more years
• Bitcoin moves back toward $10K
• July forex seasonals #2: Commodity currency climb
• WTI crude oil settles at $59.09
• July forex seasonals #1: USD/JPY in a bind
• Trump could pivot to Europe in the trade war
• Italy cuts 2019 budget deficit target to 2.04% from 2.40% - report
• Solid gains for European markets today, but some of the indices close near session lows
• Gold loses some of it's technical sparkle after G20 and US/North Korean news
• US construction spending for May -0.8% versus 0.0% estimate
• US June ISM manufacturing index 51.7 vs 51.0 expected
• OPEC agrees to extend oil output cut by 9 months - report
• Markit final June manufacturing PMI 50.6 vs 50.1 expected
• France's 10 year yield falls to record low
• Hong Kong protester demonstrations turn more chaotic.
• ECB de Cos: Inflation is far from target
• Saudi's Falih: OPEC already agreed on principles of output rollover
• More from PBOC Yi: Does not want competitive devaluation
• The USD is the strongest while the CHF is the weakest as NA traders enter for the day
• PBOC's Yi: China growth rate is right around 6%

In other markets, a snapshot is showing:

• Spot gold tumbled -$25.37 or -1.80% at $1383.93 on the back of a stronger USD. In the process, the contract fell below it's 200 hour MA at $1401. Stay below that MA (and key natural area at $1400) keeps the bears in control. For a technical look, CLICK HERE.
• OPEC met today and decided to extend the production cuts for an additional 9 months. OPEC is being undermined by US producers and is concerned about excess supply. For the day, the price of crude did make it above the $60. The US/China truce is net-net bullish for global growth. However, the price came off the highs. The high price for the day reached $60.28, while the low extended to $58.34. The contract settled at $59.09 and is trading lower at $58.86 currently. For a technical look at the crude oil contract CLICK HERE.
• Bitcoin on Coinbase is having a rough day of it. The digital currency is down -$1074.51 at $10,329.55. The low price move below the $10,000 level for the first time since June 22, and has collected more than 50% of the move up from the June 5 low (that midpoint comes in at $10,647. For a technical look at bitcoin, CLICK HERE

The US/China trade truce was reached over the weekend along with the surprise Trump/Kim meeting and agreement to reopen denuclearization talks with North Korea. That helped to propel stocks higher, oil higher, gold lower and the dollar higher.

For stocks and oil, the part of the gains were given back. Nevertheless, they both still closed higher on the day, just not as high as earlier in the session (see % ranges for the major indices below). European shares were also higher today, but closed off highs.

The moves higher in US equities was still enough to send the S&P to a new intraday high and a new all time record close (old high high was at 2954.18. The close today was at 2964.33). For the Nasdaq it too rose today (by 1.06%), but remains below the all time high close at 8163.99 (May 3). The index closed today at 8091.164.

For the US dollar in the NY session, the greenback was the strongest at the start of the session, and extended its run higher as the day progressed. To give you an idea of the NY session move, the cumulative % changes of the USDs gains vs the major currencies was 2.22% at the start of the day (see post at the start of the trading session HERE). The snapshot near the close shows a cumulative % decline of 4.68%. So the gains were more than doubled in the NY session as traders took out some of the easing from the market.

The EURUSD was hit hard, helped by the breaking (for the 2nd time today) of the 200 day and 200 week MAs at 1.1341 and 1.1345 respectively. Earlier in the day, the price moved below those MAs, only to squeeze back above in the early NY session. When the price moved back below, the price spent the rest of the day trending lower. The low price reached 1.12805 in the NY afternoon before consolidating over the last 3 or so hours of trading. The pair moved below the 50% retracement of the move up from the June 18 low at 1.12962 (and the natural 1.1300 level as well. Those levels are close risk in the new trading day. ON the downside, the 61.8% at 1.12689 and the 100 day MA at 1.12587 are the next targets.

Another pair that saw the USD advance against was the CHF. The CHF has been a safe haven currency on the back of the trade tensions. With those fears lessening over the weekend AND the reopeing of denuclearization talks with North Korea, led to a sharp 1.17% run up in the USDCHF. Technically, the move above it's 200 hour MA at 0.9806 (first time above since June 19) was the catalyst for the run higher. The pair in the NY afternoon, extended above the 100 bar MA on the 4-hour chart at 0.9868, and a topside trend line in the process. Like the EURUSD, the pair consolidated over the last 3-4 hours. The high price reached 0.9883 while the low stayed above that 100 bar MA. Traders will watch the 0.9838-42 area for support buyers on a correction lower. On the topside the 200 bar MA on the 4-hour is at 0.99515 and the 200 day MA is at 0.9975. The parity level would be another target on increased upside USD buying.

The GBPUSD in the NY session opened near swing level resistance at 1.26706 and held below that level. That helped to turn it's bias back to the downside. However, the declines were confined to 1.26315. We currently trade at 1.2641 which is below the 50% midpoint of the move up from the June 18 low on the hourly chart. Seller remain in control, but should the 50% be breached on the topside, there may be another test of the 1.2670 area. A move to new lows would target 1.2611 (61.8% of the same move higher).

The RBA is expected to cut rates by 25 basis points in the new day. For the AUDUSD, it trended lower today partly in anticipation of that cut and partly as a result of the dollar buying. Technicals also played a key role as the pair stalled right against the 100 day MA at 0.7032 level. When the price could not get above, sellers started to take the pair below lower targets. A trend line was broken at 0.7009, the 100 hour MA was broken at 0.6991. A swing area was broken at 0.6975. Finally the 100 hour MA was breached at 0.6961. That last break led into the 38.2% of the move up from the June 18 low at the 0.6955 level (that was the low). Risk for shorts is the 100 hour MA at 0.6991 through the rate decision (a move above, get out). ON the downside, the 50% midpoint and 100 and 200 bar MA on the 4-hour chart comes in at 0.69317 to 0.69385. That level may be a stall point with a break, leading to stops being triggered.