Forex news for trading on May 2, 2017
- US stocks end the day little changed at the close.
- Russia says it has cut oil output in line with OPEC deal
- Oil drop adds extra intrigue to API numbers
- Crude oil futures settle at $47.66. The lowest close since March 21.
- US April light vehicle sales 16.88m vs 17.1m estimate
- Trump and Putin spoke about Syria in phone call
- Oil breaks the trendline and then busts lower
- Le Pen: Referendum to leave the euro would take place 6-8 months after vote
- Forex brokers raise euro margins ahead of French election. Is there a trade?
- EUR/USD wants an excuse to rally above 1.10, but could hit 1.17 - banks
- UK's May: Juncker may find out I can be a bloody difficult woman
- Macron makes huge gains in latest IFOP French election poll
- There's no market boat rocking ahead of the French election 2nd round
- Europe comes back from the long weekend with a spring in its step
- Have we all forgotten there's an FOMC announcement tomorrow?
- ECB's Nouy: We're worried about a race to the bottom after Brexit
- Macron's lead crumbles in Elabe French election poll
- Auto sales roundup: Weak and weaker
- New Zealand GDT index rises 3.6%
- Forex technical analysis: EURUSD trades in narrow range. Why bother?
- ECB QE count: Bought €14.079bn vs €11.069bn prior
- ISM New York index 738.0 vs 735.1 prior
- Protectionism is never the right answer for the world economy says Schaeuble
- The strongest and weakest currencies as NA traders enter for the day
In other markets today:
- Spot gold $1256.96, up $0.30 ro +0.02%
- WTI crude oil $47.68, down -$1.17 or 2.50% (before API data)
- S&P up 2.84 points or +0.12. Nasdaq up 3.766 points or +0.06%. Dow up 36.43 points or +0.17%
- 2 year yield 1.258%,, down -1.5 bp, 5 year 1.807%, -3.2 bp, 10 year 2.2856%, -3.2 bp, 30 year yield 2.976%, -2.5 bp
From the economic standpoint today, the market had little to follow. The only economic news came from car sales which were weak (16.88M vs 17.1M estimate). Not a good start to the quarter for car sales.
Oil on other hand was in play with Libya talking about peace, and the Saudi's saying the budget was fine at $45 Brent (Brent is at $50.73). The news sent oil to its lowest close since March 21 at $47.66. The low reached $47.35. Technically, the futures contract tested a trend line support line at $47.33. The low price from March came in around the $47.00 (give or take a few cents). That area is key going forward. In after hours trading, the price has rebounded to $48.00. API data will be released tomorrow.
Today may have also been a calm before the FOMC storm tomorrow at 2 PM ET. The Fed is not expected to do anything. It is one of those meetings where there is no press conference. However, the market will be looking for clues about decreasing the Fed's massive balance sheet. It may be that the Fed refrains from putting details in the statement. Fed officials will be speaking on Friday, including Vice Chair Fischer and Fed Chair Yellen. That may be where more details are shared (Fed's Rosengren, Bullard and Evans also speaks on a panel on Friday).
Speaking of Friday, the US Employment report will be released on that day. Recall last month the number came in weaker than expectations at 98K. This month is expected to come in at 190K. Before that, tomorrow we will get ADP private employment change estimate. Last month, their number of 263K was way above the actual number of 89K (for private). What will the number tell us tomorrow (est. 175K)? Better yet, does it matter?
Tomorrow, it will be interesting to see if we get reactions off ADP employment and FOMC. You can argue, the US employment report and Fed speakers are more important on Friday.
In trading today, the dollar ended the day mixed with the greenback losing ground against the EUR, JPY, CHG and NZD and gaining against the JPY, CAD. It was little changed against the AUD.
What are technicals saying for some of the major pairs into the new trading day?
For the EURUSD, the NY session saw the price move back below the 100 hour MA at the 1.0900 area. The price fell toward key support at 1.0882-85, but found early buyers at 1.0887. The subsequent afternoon rally, has seen the price inch its way above the highs from Monday and early Tuesday at 1.0922-247. That is bullish. We closed above that level, but other targets at the last week highs (up to 1.0950) loom. So overall, the pair is more bullish above 1.0922, but it is only "just hanging on" to that bullishness (price is at 1.0928).
The USDJPY moved higher in the London session and early NY session (it traded at the highest level since March 21), on the back of higher yields (US 10 year was up 1.8 BP at the start of the NY trading day). That early rise (the high yield moved to 2.3378%), was whittled away, and by the close, the yield had moved to the day's low at 2.28% (down 3.7 bp). The fall in yields, led to the USDJPY giving back some of the day's gains to 111.95 (the low for the day was 111.77 reached in the Asian session), but quite honestly, it could have been worse. The 50% of the move down from the March 10, high comes in at 111.81. Should the price go below that level in the new day, the buyers may rethink the upside potential (at least as a trade into the FOMC statement).
The GBPUSD's low today stalled just above the 50% of the move up from the post-election announcement low (from April 21). That level comes in at 1.28597. The low reached 1.28636. That low also corresponded with the April 27th low. The rebound off the low took the price back above the 100 hour MA (currently at 1.29049 - more bullish). The pair closed above the Monday high at 1.2936. Technically, the pair has been moving higher since the snap election announcement, but it is an down and up grind higher (See a more detailed analysis HERE). Bulls are in charge, but they are walking instead of running.
The USDCHF had some weird price action today. The pair fell (on it's own for the most part) in the NY session. The fall took the price below support at 0.9930 and 0.99184 (see chart below). That should have been more bearish. Instead, the price rotated back higher and retested the 100 hour MA at 0.9942 area. The pair fell down below the support levels again. Does the selling continue now and the pair head to test the double bottom at 0.9893? Stay below 0.9930.
For the USDCAD today, the pair kept the march higher going as oil prices continued its move lower. At the peak, the price moved above trend line resistance. That break failed and the price wandered lower into the close. Is the peak in? Too early to tell. The lower trend line (see chart below) and the 100 hour MA (blue line) would need to be broken to hurt the bullish bias for the pair in the new trading day.
That's it from me. Have a good night/day.
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Below are the % changes of the major currencies vs. each other. For today, the CHF was the strongest. After up and down activity pushed that currency to the top of the list. The oil price decline, sent the CAD lower. It was the weakest.
