Forex news for North American trading on December 15, 2020
- BOC Gov. Macklem says Q4 Canada GDP will be greater than 1%
- More from BOC Macklem: If we need to do more, there are tools available
- Schumer: McConnell urging Republicans to go forward and not question electoral vote
- BOC Macklem: Economic recovery from pandemic is at a very difficult stage
- Sen. McConnell: Won't leave for year without a relief package
- WTI crude oil futures settle at $47.62
- Gold moves back toward highs for the day. Up over 1.4% on the day.
- ECB confirms reported limits on bank dividends
- Preview: Judge the Federal Reserve decision like a figure skating competition
- German DAX closes near highs for the day
- Brexit: Big buzz in last hour among Tory MPS, heading toward Brexit deal
- Senate Majority Leader McConnell says US officially has a President-elect
- US industrial production for November 0.4% vs. 0.3% estimate
- Canada manufacturing sales for October 0.3% vs. a 0.6% estimate
- US December Empire Fed +4.9 vs +6.2 expected
- Brexit: Irish foreign min Coveney says there are signs of progress
- Canada Nov housing starts 246.0K vs 215.0K expected
- Boris Johnson tells cabinet that no deal still 'most likely' outcome with EU
- The GBP is the strongest and the NZD is the weakest as NA traders enter for the day
In other markets:
- Spot gold is up $26.39 or 1.44% to $1853.70. The high price today reached $1855.43. The low price extended to $1825.61. The price of gold was helped by a weaker dollar. Technically, the price moved back above its 200 hour moving average at around $1844.
- Spot silver moved up $0.66 or 2.79% to $24.50. It's high price reached $24.56. The low price extended to $23.83
- WTI crude oil futures rose on hopes for increase economic growth from Covid vaccinations. The price is trading up $0.43 or 0.89% at $47.41. The high reached $47.73. The low extended to $46.54. There was a build of 1.979M barrels near the close. The estimate was for a draw of -1.9M. That build in crude oil comes on the back of a huge 15M last week.
The FOMC 's started their two-day final meeting for 2020 today. Tomorrow at 2 PM ET, the decision will be released with a significant minority view that the FOMC will introduce a change to the weighed-average maturity of its QE portfolio. This would mean a shift to more long-dated bond buying and less at the short end, resulting in a slightly more-stimulative environment. The USD today was lower and stocks were higher as a result.
Below is a look at the changes and ranges for the major stock indices in North America and Europe today. The Russell 2000 of small caps (+2.4%) outpaced all the major indices. The UK FTSE 100 was the laggard (with a decline of -0.28%).
Equities were also spurred to the upside - and the dollar lower - on the back of increased confidence about the vaccination process, and a more friendly Congressional tone toward a Covid stimulus package.
The electoral college voting process was completed yesterday as per expectations, but allowed for Senate Majority Leader McConnell to publicly declare Pres. elect Biden the victor, and with it, start the process of governing as the country faces record levels of Covid cases, deaths and hospitalizations along with prospects of a worsening situation as a result of the Christmas holiday season. The top 4 congressional leaders from the House and Senate - Schumer, Pelosi, McConnell and McCarthy - are all meeting with Treasury Secretary Mnuchin to try and hammer out a deal. There seems to be a willingness to not leave Washington before the Christmas break without a deal.
Looking at the rankings of the strongest to weakest currencies, the GBP was the strongest of the major currencies. It was spurred higher on the back of new hopes for a Brexit deal. The USD was the weakest of the majors.
What are the technicals in some of the majors saying as we head into the new trading day?
- GBPUSD. The stalled near a support area between 1.3283 to 1.3291 and spiked higher above the 100 hour MA and 200 hour MAs at 1.33239 and 1.33607 respectively. When the pair held support against the 200 hour MA, and positive Brexit rumblings started to permeate into the market, the price raced higher. The pair is making new highs into the close at 1.3465. The next target comes in at the high price from last Wednesday at 1.34772. The high price for 2020 from early December came in at 1.35387. Those are upside targets on further upside momentum in the new trading day.
- EURUSD: The EURUSD had a choppy up and down trading day. However, there was semi support near converged 100 and 200 hour moving average levels near 1.2126. The low did extend to 1.2120, but quickly rebounded. The high price extended to 1.2168. The 48 pip trading range was modest compared to the 22 day average of 69 pips. Going into the new day, the 1.2177 level was near highs from December 4 and yesterday (December 14). If the price is going higher, getting and staying above that double top would be the next key upside bias clue. On the downside going forward, moving below the 100 and 200 hour moving averages (both around 1.3130 now) would be needed to tilt the bias more to the downside.
- USDJPY: The USDJPY also used the 100/200 hour MAs as risk defining levels. Opposite to the EURUSD, the MAs today were resistance near 104.11. Sellers leaned near that area and pushed the price lower. The pair is closing near its low for the day level at 103.63. That has taken the price below a swing area between 103.64 and 103.713. If the price can stay below 103.713, that would be the most bearish technical clue into the new trading day. The low from yesterday at 103.506 is the next downside target. Get below opens the door for more selling in the new trading day.
- USDCAD, THe USDCAD moved below the 2020 low from a few days ago at 1.2706. The price moved to a new low going back to April 2018 at 1.26874. So far the correction off of the low has been able to stay below the 1.2706 level. That would be the best case scenario for sellers looking for more downside in the new trading day. ANother resistance level would come in at 1.27188. That was the swing low from Friday's trade and also yesterday.
