Forex news for North American trading on September 1, 2017:
- Record close for the Nasdaq, but off the highs. S&P leads the way.
- CFTC Commitments of Speculators: Speculative positions show little change
- What's up for your forex trading next week?
- US August total vehicle sales 16.14 million
- Monthly chart only: USDJPY longer term bias mixed
- Slim pickings in the September forex seasonals
- Baker Hughes total rig count rises in the current week (September 1)
- Atlanta Fed GDPNow Q3 forecast 3.2% vs 3.3% prior
- August forex seasonal scorecard
- European stocks with another up day. Week changes end mixed.
- What did the data this week do for the NY Fed GDP estimate?
- Fed could have a debate on its hands this fall - WSJ
- What's priced in for the Federal Reserve after August non-farm payrolls
- German 30 year yield moves back above 100 day MA
- SNB's Jordan: Franc weakening has contributed to reducing overvaluation
- ISM August manufacturing index 58.8 vs 56.5 expected
- University of Michigan consumer confidence sentiment 96.8 vs 97.5 est.
- July US construction spending -0.6% vs +0.5% expected
- Gary Cohn: We believe lowering corporate tax rates will lead to higher wages
- Markit August US manufacturing PMI 52.8 vs 52.5 expected
- Canada Aug Markit manufacturing PMI 54.6 vs 55.5 prior
- ECB said to see chance QE plan not fully ready until December
- Fast break the other way. EURUSD reverses on ECB comments.
- Dollar lower as employment disappoints
- August non-farm payrolls +156K vs +180K expected
The CAD is the strongest. The NZD is the weakest before US jobs
A snapshot of the other markets show:
- Spot gold up $4.00 or +0.31% to $1325.33. For the week, the price is up from 1291.37 last Friday. A bullish week for gold.
- WTI crude oil futures are ending the session little changed at $4731
- US stocks ended the day with gains. The S&P was up 0.20%. The Nasdaq was up 0.10% but closed at a record level. The Dow toyed with closing above the 22000 but ended just below at 21987 - up 39.46 points.
- US yields were higher today. 2 year 1.342%, up 1.6 bp. 5 year 1.736%, up 3.4 bp. 10 year 2.162%, up 4.5 bp. 30 year 2.773%, up 4.6 bp
The forex market geared up for the US employment report with limited gains or losses at the start of the NY trading day. A caged animal wanted to be released.
When the report showed that non farm payroll at 156K vs 180K, a negative revision to prior months of -41K, the unemployment rate higher at 4.4% vs 4.3%, average hourly earnings at +0.1% and the prior month revised to 0.1% from 0.3%. Yuck. That was not good.
The dollar moved sharply lower with the EURUSD spiking up to 1.1979 (higher EUR, lower USD). That run higher tested the 61.8% of the weeks trading range at 1.19753. The move took the price above the 100 hour MA at 1.1937 and a broken trend line at 1.1953 (see post here). That would be support on a correction, but the buyers were back in control.
For the USDJPY, the pair tumbled (dollar lower). It's price fell from 110.06 to 109.557. The 200 bar MA provided support at 109.54, but a break would lead open the door for more selling. The sellers were in control for this pair.
The GBPUSD rallied to its 200 bar MA on the 4-hour chart at 1.29858 (high reached 1.2995). That move took out the highs for the week (at 1.2978), and traded at the highest level since August 14.
The USDCHF fell below it's 100 hour MA at 0.9571.
The caged animal was released. The dollar was heading lower.
Then, not more than 10 minutes after the release, headlines saying the ECB policy makers may not be ready to finalize their decision on next year's QE program until December. That means hopes of some tapering plan being announced at next weeks meeting was out of the question. It means that the the October meeting might be out of the question too. The timing of the announcement implied that the ECB was not anxious to see the EUR race higher on poor US data. That was evident to traders.
So fast break the other way for the greenback.
The EURUSD fell back below the 100 hour MA, a lower trend line at 1.1887, and the 200 hour MA at 1.1876 on its way to a low of 1.1848. The correction off the low stayed below the broken trend line, and in the afternoon trading below the 200 hour MA at 1.1878. Bears are in control again.
The USDJPY rebounded back up to the 200 bar MA on the 4-hour chart at 110.28 and stalled. We are closing the week just under that MA at 110.287.
The GBPUSD moved modestly lower back toward 1.2950. The modest decline was because if the ECB wants the EUR lower, it not only wants the EURUSD lower, but also the EURGBP too. That pair tumbled from 0.9215 to 0.9149. We are ending the week for that pair at the lows (and below the 100 bar MA on the 4-hour chart at 0.9163).
The USDCHF rallied back higher and was helped by comments from SNBs Jordan. The move higher surpassed the 200 hour MA (at 0.9604), the 200 bar MA on the 4-hour at 0.9624, the 100 bar MA on the 4-hour at 0.9633 on the rebound. Bulls are back in control above those levels. The price is closing at 0.9641.
So a bearish dollar party was called by the US employment release, but the ECB crashed the party and trashed the bears house in the process.
Next week, we will see if the dollar buying will continue (and what Mr. Draghi has to say for himself on Thursday (see calendar of major releases and events here).
Below is a snapshot of the % changes of the major currencies vs each other.
