Forex trading news for New York on December 19, 2016
- US stocks end the day with modest gains.
- Italian cabinet agrees to ask parliament to raise debt by 20B
- More geopolitical news: Truck plows into Christmas market in Berlin
- EURUSD falls to new session lows
- EURGBP retraces back below 200 hour MA
- Feds Yellen: Job growth strongest in a decade.
- Italy said to weigh increase in public debt for bank aid
- Forex trading: USDCHF tests 100 hour MA and stalls
- ECB Weidmann: ECB policy becoming looser automatically as real rates fall
- European stocks end the session mostly lower
- Russian Ambassador to Turkey shot in Ankara
- UK PM May: May continue to pay into EU budget if good value for the money
- Barclays: 3 reasons for sharper USD near term upside risks
- ECB public sector purchase program (PSPP) 1.244T (vs 1.228T prior)
- US Markit Services PMI for December (P) 53.4 vs. 55.2 estimate
- The strongest and weakest currencies as NA traders enter for the day
In other markets today:
- S&P index closed at 2262.53, +4.46 points or 0.2%
- NASDAQ composite index closed at 5457.44, +20.279 points or 0.37%
- Dow industrial average closed up 39.65 points or 0.20%
- 2 year notes 1.220%, --3.2 basis points
- 5 -year notes 2.021%, -4 basis points
- 10 year note 2.538%, -5 basis points
- 30 year bond 3.123%, -5 basis points
- Spot gold $1139, +4.49 or 0.4%
- Crude oil futures $51.80, -0.8 cents or -0.15%
- The JPY is the strongest currency today, while the GBP is the weakest.
The JPY was the strongest currency today, falling against all the major pairs. The GBPJPY was the biggest mover. It fell 1.56% (JPY stronger). The AUDJPY, NZDJPY, CADJPY and EURJPY were all down sharply. Each have enjoyed pretty good size gains since the November elections. They all peaked last week (Thursday). ON that day, the USDJPY stalled after breaking above a key resistance area between 118.06 and 108.51. The high that day reached 118.65, but stalled. ON Friday, the high only reached 118.42.
IN trading today, the USDJPY stalled the fall at the 116.54 level. This was the 38.2% of the move up from the December 7th swing low. That level comes in at 116.5421. A comment from Fed Chair Yellen that she saw signs of wage growth, helped to push the pair back higher (some of the other JPY crosses modestly bounced as well). Geopolitical influences (Russian Ambassador to Turkey was assassinated and a truck in Berlin plowed into holiday shoppers) also may have influenced the dollars NY afternoon bid. The USDJPY moved back above the 100 hour MA and is closing near the level at 117.05. That MA will be the barometer for the bulls and bears in new day trading.
In the new trading day, the BOJ will announce their interest rate decision (no change expected). The market will be focused on the statement and press conference.
For the EURUSD, the pair is opened the NY session near the 104.00 level (104.10 was the early NY session low), but then rallied higher - helped by a bid in the EURGBP. The EURGBP peaked and started its fall lower,and so did the EURUSD. The Yellen comments helped push the pair to new session lows. but buyers seemed to be supportive near the 1.0400 level.
The GBPUSD was a leader to the downside in trading in the early part of the NY session but moved into a support area defined by swing highs and lows going back to early November (see post here) That support comes in the 1.2350-79 area. The low extended to 1.2354 before rebounding. PS the EURGBP was also influential in this pair too.
The USDCHF was under pressure into the NY midday, but stalled at its 100 hour MA at the 1.0218 level. The low reached 1.0220 and started a corrective move higher into the close. (up to 1.0272). The stronger USD tone helped. Be aware of the EURCHF. It fell in trading today and tests support at the 1.0680 level (trades at 1.0684).
The NZDUSD fell below support from the June, July and November lows at 0.6951-65 on Friday, but could not close below that level. ON Monday, the price closed below that area turning the bias more negative for the pair. Stya below and there is room to roam lower still.
The AUDUSD is also under pressure and technically fell and closed below support in the 0.7284 to 0.7310 area. Like the NZDUSD, the AUDUSD is closing at the lows for the day. Stay below the aforementioned level and the bears remain in control.
Below are the % changes of the major currencies vs each other on the day.
