Forexlive Americas FX news wrap: Coronavirus stimulus package starts to be debated

Forex news for NY trading on July 21 , 2020.

In other markets today:

spot gold continues its run to the upside as the lower dollar, investor demand for the relative safety of the precious metal and favorable technicals have helped push the price higher. The spot price is currently trading up $24 or 1.32% at $1841.81.
WTI crude oil futures are also moving higher. The September contract is trading up $0.74 or 1.81% at $41.66. The high price extended to $42.51. The low price fell to $40.74. The 50% retracement of the 2020 range comes in at $41.71. The price is currently trading just below that level. In the new trading day, however, the level will be the barometer for the bulls and the bears. Move above is more bullish. Stay below is more bearish

The only economic release out of the US today was a Chicago national activity index. It did rise to the highest level on record at 4.11, but comes off record low levels from 2 months ago. The index is a comp. of 85 indicators. As such the sharp month-to-month decline in economic activity from the coronavirus, followed by the sharp rebound from the lows as a dramatic impact on the index.

The other economic release came out of Canada where retail sales for May rose 18.7%. That helped retrace part of the -25.3% decline from the prior month. However, the year on year measures continue to be well off last year's levels (-18.4% year on year for the headline number). The impact from the "weaker than expected" data did not stop the CAD from continuing its move to the upside (Lower USDCAD). The pair was helped technically by the decline below its 200 day moving average at 1.35108. That break turned dip buyers into sellers. That trend continued until bottoming in the New York afternoon session at 1.3424. Higher oil prices helped to support the loonie, along with general selling of the US dollar in trading today.

Forex news for NY trading on July 21 , 2020.

The US dollar was the runaway strongest currency of the day. A good chunk of the decline was against the Aussie dollar (-1.53% on the day), and the the NZD (-0.94%). The AUD was the the strongest of the majors as commodity prices increasing gave the pair an added boost (gold up 1.34%, silver up 6.94%, copper up 1.47%, iron were up 2.16%).

The AUDUSD had an oversize trading range of 140 pips. The 22 day average (about a month's time) is 66 pips. At one point today, the pair at 14 consecutive bars of unchanged are higher (one was unchanged during that run, but most ran to the upside). Technically, the price extended just above the 61.8% retracement of the move down from the 2018 high to the 2020 low. That level came in at 0.71319. The high price extended to 0.7146 before rotating back down into the close. The prices trading around 0.7122 currently. The 61.8% retracement level will be a barometer for the new trading day.

Other influences today and stories centered around the next coronavirus stimulus which looks to be somewhere around $1 trillion. Not only are the Republicans and Democrats debating the merits of the details, but there is some internal dissension within the Republican Party as well. In particular, the payroll tax debate. The President has said it must include a payroll tax cut. Democrats argue that doesn't help workers out of work. Some Republicans are also leaning that way.

Although unemployment relief will expire at the end of the month, the expectations are that a bill may not be passed this week or even next. That could lead to more volatility in markets as back and forth headlines drive markets crazy.

The president will hold a press conference/information conference on the coronavirus at 5 PM. Ready or not. Here it comes.

Stocks today were mixed with the NASDAQ down, the S&P eking out a small gain and the Dow industrial average leading the way higher but closing near its lows. In Europe shares close higher but near session lows at the end of the day: