FX news for traders on July 11, 2017.
- Nasdaq rises, but S&P and Dow end little changed
- GBP/USD: Vulnerable into UK employment report Wed; 50 DMA break targets 1.27 - TD
- Q3 here we come…
- Trump's planned visit to UK delayed until next year - report
- BOC will hike with a neural statement - BAML
- Fed's Brainard: Will assess inflation before deciding on further hikes
- The market is conditioned to buy the Trump dips
- EIA trims 2018 US crude production estimate
- Oil hits a session high as OPEC hits 97% compliance in June
- Atlanta Fed Q2 GDPNow 2.6% vs 2.7% prior
- Fed's Harker: Let's halt reinvestment and then consider third rate hike
- The US dollar and stock markets don't like the look of the latest Trump-Russia connection
- Donald Trump Jr releases email chain on the latest controversy and it doesn't look good
- What's priced in for the Bank of Canada this week and beyond
- May US JOLTS job openings 5666K vs 5950K expected
- May final US wholesales inventories +0.4% vs +0.3% expected
- Cable goes down easy
- Merkel: ECB policy isn't where we want it to be yet
- BOE's Broadbent: Less trade after Brexit would lift prices
- Saudi Arabia raises production to slightly above OPEC quota
- The strongest and weakest currencies as NA traders enter for the day
- Canada June housing starts 212.7K vs 200K expected
- ECB's Coeure: Currency depreciation a side-effect of ECB policy, not the aim
In other markets:
- WTI crude rose $1.36 to $45.76
- US stocks ended mixed. The Nasdaq rose by 0.27%. The S&P fell -0.8%. The Dow ended unchanged
- US rates were unchanged to down -1.6 bp lower. 2 year 1.375%, down 1 bp. 5 year down 1.915%, down -1.6%. 10 year 2.360%, down -1.2%. 30 year 2.923%, unchanged
Don Trump got in trouble again today. This time it was DT Jr. who outed himself with an email string that implicated himself regarded talks with Russians about the US election - more specifically classified dirt on Hillary Clinton. The NYT was going to break the news. DT Jr. did it himself. Stocks fell. The dollar fell against some of the currencies. The stock fall did not last but some of the declines of the dollar stuck.
The EURUSD, which had a 17 pips trading range at the start of the day, ended with a 97 pip range and it was all higher. Technically, the pair based against its 100 hour MA at the lows, and ended up taking out the highs for 2017 and moved above a key ceiling area defined by a number of swing highs going back to Feb 2015 in the 1.1435-65 area. There have only been 6 trading days where the price closed above this area. Today, the price closed at 1.1466 - a pip above the area. So make it 7 closes since Feb 2015. In the new trading day, stay above 1.1435 an the bulls are still in control. Move below and the waters are muddy.
The USDCAD was a pair that bucked the dollar bearish trend on Tuesday. That pair has been trending lower since early May. The move has been supported by more hawkish statements from BOC officials, who seem to have wanted to pave the way for a rate hike (or two or three). Tomorrow is the interest rate decision from the BOC at 10 AM ET/1400 GMT, and the market saw some minor buying into the decision (CAD selling). The price of the USDCAD, did move above its 100 hour MA at 1.2926 (currently) briefly. It tried the same stunt last week on a couple of occasion. However, like last week, the break failed to extend to the 200 hour MA at 1.2951 (the high reached 1.29428) and ended the day back below the line. Into the new day of course risk will be elevated at the meeting time. If the BOC signals a one and wait/done scenario, the pair has room to run higher. If instead they signal that this starts a series of unwinds (ala the Fed), the USDCAD can continue lower.
The GBP was another pair that saw the dollar move higher against it today (and the GBP lower). The GBPUSD was first supported in the London session, and even pushed above the 100 hour MA as 1.2910 area. However, when BOE Broadbent came out with less hawkish comments, the pair reversed, moved below the 38.2% retracement support at the 1.2860 level and stayed below that level for the rest of the trading day. In the new day, watch 1.2860 as a close risk level. Stay below is more bearish (close risk for short). On the downside, the 1.2808 is the 50% of the move up from the June 21st low. UK employment will be released in the new trading day. The market might pay attention to the wages (like the US data) for inflation clues. It is supposed to come in at 1.8%, well below the CPI inflation numbers and may suggest price pressures are more transitory in the US economy.
The USDJPY started the NY session supported. However, Trump Jr, and lower stocks and technical resistance at 114.50 area stalled the rally and moved the price lower. IN the US afternoon session, the pair briefly moved below the 100 hour MA at 113.78 (the low reached 113.71. The pair closed the day at around 113.92. In the new day, the sellers have to prove they can get the price below the 100 hour MA again and stay below. Until then, the tumble lower is simply a correction of the trend move higher.
The NZDUSD was weak coming into the NY session and moved below the 200 bar MA on the 4-hour chart at 0.7216. However, the pair found support at the natural 0.7200 support level and rebounded back above the MA line. The correction retraced to the 50% of the day's range but rotated back lower into the close. The pair still remains above the 200 bar MA on the 4-hour chart at 0.7216. A move below that MA will be eyed for more bearish potential.
While the NZDUSD was moving lower, the AUDUSD was more supported today. In the NY afternoon, it moved back above its 200 hour MA at 0.7624 level. The level is close support in the new trading day.
With the NZDUSD moving lower and the AUDUSD moving higher the AUDNZD was on the move higher. That pair moved above the double top at the 1.0550 level today (highs from June and early July). Stay above the 1.0550 now and a test of the 200 hour MA at 1.0604 will be eyed.
Wishing you all good fortune in your trading.
