Forex news for NY trading on March 14, 2017
- US stocks open in the red and and stay in the red
- FOMC preview: Hike a done deal, signals about what's next will be the story
- Lighthizer might have just given a hint on how Trump will treat China FX manipulation
- WTI Crude oil settles at $47.72 /bbl. Down 1.4% on the day
- The US political risk-meter is rising again
- The T-note isn't quite ready to break out
- EURUSD falls to new session lows. Tests the 100 hour MA
- Saudi Arabia says higher Feb output due to storage adjustments
- Get ready for a huge 48 hour stretch in financial markets
- French election IFOP poll: Le Pen 26.5% Macron 25% in the 1st round
- The walls are painted red in Europe
- Netherlands poll shows Rutte's Liberals at 29 seats
- IMF says global economy showing more positive momentum
- With all the focus on May triggering Article 50, did anyone bother asking the EU about it?
- Russia oil production cut reaches 179K bpd from October but still not meeting committments
- Saudi rise in oil production in February said to have gone into domestic storage
- There's 3 levels the pound needs to hold or it faces a collapse
- The accusations against Fillon are ugly
- Eurozone interest rates are too low says Germany's Schaeuble
- Fillon placed under formal investigation
- The US weather could hit March's nonfarm payrolls
- The oil freefall continues as crude hits lowest since November
- February 2017 US PPI final demand 0.3% vs 0.1% exp m/m
- Canada February Teranet house price index 13.4% y/y vs +13.0% prior
A snapshot of other markets near the end of the trading day
- Spot gold down anther -$6.00 or -0.51%. The price is back below the $1200 level to $1197.88
- WTI crude oil is trading back higher and unchanged at $48.40 in after hours trading. The API data showed a draw down of -0.531 MBD of crude. The price traded as low as $47.09 today
- US stocks were lower. S&P closed down -0.34%. Nasdaq closed down -0.32%. Dow closed down -0.21%
- US yields were flat at the front end of the curve. 10 year yields are down -3.5 bp to 2.6% and 30 year bond yields down 3.5 bp to 3.177%.
US PPI was higher than expectations today. It rose by 0.3% MoM both for the headline and the core (vs +0.1% and +0.2% est). The YoY increase of 2.2% was the highest since March 2012. Although producer prices are not the most followed of inflation measures, they are showing a positive trend and could lead to higher consumer prices down the road (or so the theory goes). Tomorrow the US CPI data will be released with the headline expected to come in unchanged, while ex food and energy estimated at +0.2% Also released tomorrow will be the Real Avg weekly and hourly earnings YoY. last month they came in at -0.5% and +0.1% respectively. Those numbers caught the markets attention. Retail sales will also be released with expectations of +0.1% for the headline and +0.2% ex auto and gas. ALL that comes before the FOMC decision tomorrow at 2 PM ET (1800 GMT), followed by the Fed Chairs press conference at 2:30 PM ET (1830 GMT). The Fed is largely expected to raise rates by 0.25%. For a preview, sees Adam's "FOMC preview: Hike a done deal, signals about what's next will be the story"
In other news: Saudi increased production but said it went into domestic storage. Frances Fillon placed under formal investigation. European stocks and US stocks were lower.
What did all that do for the dollar today? The dollar did move higher against all the major currencies with the exception of the JPY where it was down marginally. However, the ranges and changes were fairly contained. The big winners for the greenback were against the GBP (+0.57% - all conditions are set to trigger Article 50 which has traders nervous) and the EUR (+0.48% - Netherland election tomorrow and French elections are ahead). The FOMC is also helping to keep the green back supported. Does the market price in an extra tightening in 2017
What about some of the major currency pairs today and going into tomorrows big day...
The EURUSD fell back below the 100 day MA (at 1.0654 in the new trading day) and closed near lows for the day at 1.0600 area. The 100 bar MA on the 4-hour chart is at 1.0579. That is the next target to get to and through for the bears. On the daily chart the 1.0526 is trend line support (trend line connecting the Jan and March lows). On a continued move lower, the 1.0493/94 were the last two lows - on Feb 22 and again on March 2nd. That level is a big line in the sand for this pair. We are 110 pips from that key level. Seems like a long way given recent ranges, but it is doable. That bearish apple cart will be overturned if the price moves above the 100 day MA again. Yes, the break on Friday failed, but if data is not up to snuff, and the Yellen/the Fed is more dovish, we can easily shoot higher. That 100 day MA will be eyed.
The range over the last 3 or so months in the USDJPY has a high of 118.65 and a low of 111.58. The 50% of that range is 115.12. In trading today, the price peeked above that level but only to 115.18.. We are down to 114.75 currently. A move above 115.18 will be more bullish (if it can stay above). On the downside, the close support comes in at 114.44. That is where the 200 hour MA is located and is also where the low from yesterday stalled. A move below that level should be more bearish for the USDJPY.
The GBPUSD was back down in trading today after a one day hiatus to the upside. As mentioned above, it moved the most against the greenback - falling by about 0.57%. There isn't a lot of support. I am looking at 1.2121, then 1.2082. Below that the 1.1986 level (low from Jan) will be the final support level. We are still 160-170 pips from the lowest support level, but that is REALLY not that far. We can easily get there with all the going on in the UK. Tomorrow, we do get UK employment data and then the BOE on Thursday. At some point, PM May will trigger Article 50 and start the clock for EU negotiations. Who the heck really knows, but it is easier to sell than to buy (certainly that is true over the last 13 days where only 2 days were higher). Nevertheless, what would upset the bearish apple cart in this pair? 100 hour MA at 1.2173. 200 hour MA at 1.2203 and 1.22.51. That was near the high from March 7th and from March 13 as well (double top). A move above that level and there is room to rally/correct. Markets can still go both ways. Traders may sell rallies but it can rally.
The AUDUSD's fall today stalled at the 100 hour MA (at 0.7541 now) and just ahead of the 200 day MA at 0.7535. The 100 day MA is at 0.7512. The highs today and yesterday traded above the 200 hour MA (at 0.7560 and close to the closing level today) but could not get and stay above the 38.2% of the move down from the Feb 23rd high at 0.7585. That is the buyers problem. If the AUDUSD is going higher, it needs to get and stay above that level.
With oil falling by 13% from the highs toward the end of February, you would expect that the USDCAD would have gone higher. And it has. The price of the USDCAD has moved from 1.3000 to a high of 1.3534. That high was reached last Thursday. We are below that level now even though oil continued to new lows today. HMMMM. The link is breaking down a bit. Today however oil was down and the CAD went lower as well. So perhaps we are getting back in sync after a few day hiatus. What level are key for this pair technically? ON the downside, there is a trend line line on the hourly chart at 1.3452 and the 200 hour MA at 1.3441 (both are moving higher). A break below the 200 hour MA would be the first since Feb 27th. Pay attention. On the topside, the next targets are the March high at 1.3534. Above that the 50% of the move down from the Jan 2016 high comes in at 1.3575. We traded above that level in Nov and Dec 2016 for 1 day each with no closes above. That is the key level for the bulls to get to and through.
Below is a snapshot of the % changes of the major currencies vs. each other. The JPY is the strongest today, while the GBP is the weakest.
