Forex news for US trading on October 12, 2016
- Flows - not a bullish or bearish conviction - dominates the dollar trading
- Sep FOMC Minutes: 'November now clearly on the table' for Fed's next hike - CIBC
- US crude oil futures and settle at $50.18 per barrel
- December Fed hike odds sit at 66.7%
- Dollar slides on FOMC Minutes but quickly rebounds in two way action
- FOMC Minutes: Several voters thought rates should rise 'relatively soon'
- Trading the FOMC Minutes - Views from 11 major banks
- A red day for European stocks
- Forex technical analysis: USDJPY breaks above September high
- Carney met with Merkel in Berlin today
- Bring your tape measure for the release of the FOMC minutes
- August 2016 US JOLTS job openings 5.443m vs 5.724m exp
- Putin's up for freezing but not cutting oil output
- UK's Davis says government can not give details on Brexit negotiation positions
- More from Dudley: Economic expansion has plenty of room to run
- US Fed's Dudley says they do not conduct policy with an eye on politics
- UK's Davis: Glad opposition makes clear that he respects the will of the British people
- USDJPY is on its way to another test of 104
- The strongest and weakest currencies as NA traders enter for the day
Yesterday saw the GBP as the weakest currency and the JPY as the strongest. Today that dynamic was reversed. The GBP pairs all got a boost from concessionary remarks from PM May that parliament would have a say in the Brexit. That sent the pair up sharply in the Asian Pacific session. The NY session was not as GBP friendly, however, as UK Brexit Minister countered with "no party will have the right of veto on Brexit" and "it is governments right to trigger Article 50". At the same time, he commented that "government wants to create a national consensus on negotiations". So there was a little give and take. Nevertheless, the market had ear blinders on and back down went the GBPUSD. The GBP pairs ended up with gains on the day, but those advances were certainly off the peaks.
The USDJPY (and JPY crosses) also saw rising prices (lower JPY). Stocks were somewhat stable, while US bond yields were higher (+4-5 basis points) in anticipation of a more hawkish Fed minutes. That helped to push the USDJPY above the 104.00 level and then the September high at 104.31 as well (the high peaked at 104.475). Profit taking and then FOMC meeting minutes that did not really tell us anything different, sent bond yields down toward unchanged on the day, and the USDJPY back lower as well. The pair is closing with solid gains but back below the September high at 104.31 : ( . In the new trading day, traders will want to see that pair take out that old high and stay above.
The EURUSD had another down day today and ended up closing near the low in with a late day wander. In the process, the pair fell below trend line support on the daily chart at the 1.1034 level. Stay below that level and the bears remain in control. The July low at 1.0951 and the June low at 1.0909 become the next targets as long as that broken trend line remains broken (at 1.1034).
In other pairs:
AUDUSD: Decision time. The 100 day MA held like a charm today at 0.7529. Buyers showed up there and provided a nice support floor. The not so bullish is that there was a resistance ceiling at the 200 bar MA on the 4-hour at 0.7588 area. We are closing in the middle of each extreme. So right now if you have a gut feeling, define risk against the opposite extreme - i.e buy against the 100 day MA or sell ag. the 200 bar MA on 4-hour chart. Alternatively, wait and trade a breakout and look for momentum on the break.
NZDUSD: This pair has moved, and remains below the 100 day MA at 0.71575, and is also below the 50% of the move up from the May low at 0.70798 (more bearish if it stays below). There is trend line support at 0.7015 and better support near 0.6950-65 area. Shorts are more in control, but would be interested in a patient buy against the 0.6950-65 area if it gets down there.
In other markets,, the US stock indices were mixed with the S&P 0.11% and the NASDAQ down -0.15%. The Dow industrial average increase by 0.09%.
US bond yields were little changed +/- 1 basis point along the curve.
Crude oil prices were down about $.50 or 1% on the day.
Below is a snapshot of the percentage changes in the major pairs vs each other.
