Forex news for NY trading on Monday, November 14, 2016.
- CFTC commitments of traders: Speculative positions at 9 1/2 month highs
- EURUSD post Trump: 2 Key reasons to sell - Citi
- More Kaplan: Rising yields does not have implications for Fed policy
- Fed's Kaplan goes political...
- ECB Praet: it is vital that fiscal authorities rebalanced towards more growth
- USDJPY deciding what to do next against support trend line
- WTI crude futures reach session lows.
- European stocks end mostly higher
- Forex technical analysis: GBPUSD bounces off support
- Dollar rising. Dollar at highs vs JPY, EUR and CHF
- Forex technical analysis: GBPUSD following the dollar higher today
- Central bank speakers ahoy
- New record highs at the US open
- Single market must be a priority for Germany and EC in Brexit negotiations
- The strongest and weakest currencies as NA enter for the day
In other markets today:
- S&P index -0.01%. Nasdaq composite index down -0.36%, Dow industrial average is up +0.11%
- Spot gold $1218. Down -$10.00 or -0.83%. Low $1211.60. High $1231.32
- WTI Crude: $43.68, Up $0.27 or +0.60%
- US 10 year yield 3.0012%, up 6.7 basis points. The 2 year was up 7.7 basis points. The 5 year is up 10.15 basis points. The 30 year is up 6.7 basis points
- The strongest among the majors: USD. The weakest: JPY
The USD was the strongest currency in trading today with the dynamics from last week, continuing this week.
- Bond yields continued to move sharply higher with the US 10 year moving up over 6 basis points.
- Yields are higher on the back of expectations for higher growth as a result of new infrastructure spending, less regulation, lower taxes under Trump. The probability of a December rate hike is now 92%.
- Gold continued it's fall as traders flight to quality bid fades and the dollar gets stronger.
- Stocks were little changed but the flows out of tech, into industrials continued (although overall, stocks did not race higher anywhere today.
What happened with some of the major pairs and what might we expect in the new trading day?
The GBPUSD was a bit different in trading today, versus the other days post election. ON Thursday and Friday, the GBPUSD moved higher. Today, saw the pair give up some/most of those gains. IN the NY session we saw the price move toward a key technical support level defined by the 200 hour MA and an upward sloping trend line (see post here). That technical level held like a charm and will be key in trading in the new day (at 1.2452 currently and moving higher). Stay above is more bullish. Move below and we should see a further move lower toward 1.2410 (200 bar MA on the 4-hour chart) and the 50% retracement at 1.23933.
The EURUSD fell below a key support level defined by a collection of 21 month swing lows between 1.0777 and 1.0821 (we traded lower but most of the lows going back that far stalled at the area). The EURUSD's fall ticked below the lows for the year at 1.0710 and 1.07113 (low reached 1.07086). However, that break went no where, and we saw a corrective move up to 1.0758 before settling lower. We enter the new day with the bullish or bearish dilemma? Is the double bottom at 1.07086-11 area going to hold? Will we move back above the upside resistance between 1.0777 and 1.0821? OR do we keep the bearishness going and break to new year lows - opening up the pair for a run toward December 2015 lows of 1.0518? With the double bottom, I cannot rule out sellers from above taking profit, but be on the lookout for sellers on rallies toward that 1.0777-1.0821 area too.
The USDJPY is another pair that saw continued upside gains. Last week, there were sellers lined up against the 107.00 level. Today, that level was broken early in the Asian Pacific session and there was little in the way of resistance to stop the march to 108.00 and above. Nevertheless, after peaking at 108.537 in the North American session (the 200 week moving average is at 108.423 this week), the pair rotated down to support against both the 100 bar MA on the 5- minute chart and an upward sloping trend line. The 100 bar MA gave way (it was tested 3 times and held prior to the break). However the trend line did hold near the 108.00 area for the 4th point on the line, and the subsequent rally has taken the pair back to the highs at 108.53. We end the day near that level, with close support at the 100 hour MA at 108.26 and the trend line at 108.14. Each are moving higher. A level to be aware in the new trading day is 108.423. As mentioned above, that is the 200 week MA this week. We are closing right at that level today.
The USDCHF was yet another pair that showed dollar strength. Like the EURUSD, this pair extended to a prior extreme, took out that extreme by a few pips, but failed on the break. For the USDCHF, the October high at 0.9998 was broken. The price even made it above parity for the first time since March (high reached 1.00012), but rotated lower into the close. In the new day, close support will be eyed at a trend line on the 5-minute and 200 bar MA (see chart below).
Below is a snapshot of the % changes vs. the major currencies vs each other.
wwill
