Forexlive Americas forex news wrap: Oil surge leads to CAD strength

Forex news for New York trading on November 15, 2016

Crude oil futures settle at $45.81, up $2.49
GBPUSD jumps on Sky news report. Brexit could be delayed 2 years
USDJPY reaching for the next target
Forex technical analysis: EURUSD looking to test the 2016 lows
Germany Schaeuble wants Fed and ECB to end low rate policy soon
Feds Fischer: Does not comment on US economy or monetary policy
BOE's Broadbent has seen nervousness in businesses with trade to Europe
Crude oil futures are up over 4% on production cut hopes
OPEC's Barkindo is fuelling up the negotiating bus
Modest gains for European stocks at the close
Atlanta Fed GDPNow sees 4Q GDP at 3.3% vs 3.1% last
More flash crashes are inevitable due to technology
September 2016 US business inventories 0.1% vs 0.2% exp m/m
The GDT auction prices rise 4.5% at the current auction
Fed Tarullo: Does not see recession risk particularly high
Boston Feds Rosengren: Much more accommodative fiscal policy=more hikes
Canada Teranet/National Bank HPI Oct mm +0.3% vs +0.8% prev
US Empire Manufacturing for November 1.5 vs. -2.5 estimate
US Import price index MoM for October +0.5% vs +0.4% estimate
US retail sales Oct mm +0.8% vs +0.6% exp
The strongest and weakest currencies as NA traders enter for the day

Other markets:

S&P index rose by +0.75%. NASDAQ composite index increased by +1.10%. Dow Jones industrial average increased by +0.29%

US debt markets saw yields move lower. The 2-year note is trading at 1.000%, unchanged. 10 year note yield 2.2366%, -2.4 basis points. 330 year bond yield 2.9691%, -4.2 basis points
Spot gold is trading at $1227.50, +$6.50 or +0.53%
Crude oil futures are trading at $45.91, plus $2.59 or +5.93%
The strongest currency today is the CAD. The weakest is the JPY.
The USD was up against the EUR, GBP, JPY, CHF and NZD. It was down against the CAD and unchanged vs the AUD.

The key event today was the US retail sales. They rose by +0.8% vs+0.6% estimate. The Ex autos came in at +0.8% vs. +0.5%. The control group rose by +0.8% vs +0.4% estimate. That was good for a pop in the 4Q GDP estimate from the Atlanta Fed to 3.3% from 3.1%. it is a bounce back from a bad 1H of 2016, but it is a step in the right direction and certainly helps the decision by the Fed in December. PS the probability of a 25 basis point rise is up to 94%. It is a matter of just doing it for the Fed. So stop pretending....(Yellen talks on ~~Friday~~ Thursday. We will see how scared she is then).

The trends in the markets were more corrective with the exception of the USD (which moved to higher levels today). In stocks, the Nasdaq led the way and although the Dow was up, the leaders seen in the industrials over the last few days, were more corrective. Bond yields which saw the 10 year move to 2.30% yesterday, came down a few basis points today. Gold rose by near $7 after getting hammered since the election. The biggest mover, however, was oil which rose by nearly 6% toward $46.00 on the back of hope for more OPEC production cuts. It was only yesterday, that the price was down near $42.00 (low reached $42.20). The $46.00 level is key resistance. We will see if it puts a lid on the price in the new trading day.

The rise in oil helped the CAD dollar move higher (and the USDCAD move lower). That pair was testing the 50% of the years trading range yesterday at the 1.3575 (the high reached 1.3587). Today it is going out at the end of the day testing the 200 hour MA at 1.3442 (earlier it broke below the 100 hour MA at 1.3497). There should be support buyers/profit takers against the level with risk defined and risk limited, but expect stops on a momentum move below the level (click here for post on it).

The USDJPY is another pair which has moved to an extreme near the close. The pair on Friday stalled against the 107.00 level and traded above and below the 200 day MA (currently at the 106.50 area). On Monday it was off to the races as bond yields rose and dollar buying picked up steam. Today, that rally continued toward that retracement level. The high moved 6 or so pips above the 38.2% retracement level - and it may still go higher - but traders may have reached at the least a level to take a breather. A move below the 109.00 level will help to take some of the steam out of the upside momentum. A move below that level will next target the highs from yesterday at 108.54. In trading yesterday, there were 3 separate highs in that area (the 50% of the day's range today is at 108.535 too).

The EURUSD tested two key extremes in trading today. At the the highs - reached in the London/European morning session - the price tested key resistance at the 1.0821 level. The 1.0777 to 1.0821 area defined lows going all the way back to May 2015. The high corrective price found willing sellers at 1.0816. The low today tested the lows for the year at 1.07086. That low was made yesterday - taking out the January 2016 lows at 1.0710/11. The low today reached 1.07134. The floor level is being stomped on. Can it break below in the new trading day?

The GBPUSD had a down and up trading day today. At the lows in the NY session, the price tested the 50% midpoint retracement of the move up from the October 24th low. That level came in at 1.23774. The low came in at 1.2379 (see post here). Later in the NY session, the pair squeezed higher on a report that Brexit could take as long as 2-years. That took the price back toward the 100 hour MA at 1.2500 level. However, the momentum stalled and the price rotated back lower. In the process of the ups and downs, the pair defined a range with 1.2500 above and 1.2377 below. An interim level above might be the 200 hour MA at 1.2467. Keep an eye on that level in the new trading day for bullish or bearish clues.

For the NZDUSD, the lower trend line held for the 2nd day in a row and bounced. If it is broken, the 38.2% at 0.7050, and the 200 day MA at 0.7018 are other targets that will be hard to crack. The 200 day MA has not been broken since mid March.