Forex new for NY trading on November 21, 2018.
- UK Hammond: Smooth Brexit worth tens of billions of pounds to UK
- UK May to return to Brussels on Saturday
- Crude oil futures settle at $54.63
- Brexit negotiators are said to be working through night to finalize a deal
- Juncker/May fail to finalize a deal over Brexit terms
- Goldman Sachs GDP tracker cut to 2.4% from 2.5% last
- Baker Hughes rig count show oil rigs at 885 vs 888 last week
- European shares end with solid gains
- US 10-year TIPS sell at 1.109% above inflation, a touch higher than expected
- Atlanta Fed GDPNow remains unchanged at 2.5%
- EIA US weekly oil inventories +4851K vs +3450K expected
- US existing home sales for October 5.22M vs 5.20M expected
- November final U Mich consumer sentiment 97.5 vs 98.3 expected
- WTO to set up dispute panel to rule on US-China intellectual property rights
- Why the sudden worry on business investment
- US October durable goods orders -4.4% vs -2.6% expected
- US initial jobless claims 224K vs 215K expected
- Canada September wholesale trade sales -0.5% vs +0.3% expected
- The NZD is the strongest, while the JPY is the weakest as NA traders enter
In other markets:
- Spot gold up $4.40 or 0.36% at $1226
- WTI crude oil futures is up $1 or 1.83% at $54.41
- Bitcoin on Coinbase is trading up $100 and $4432. The low for the day extended to $4180, while the high reach $4627.
In the US debt market, yields are mixed by trading more near lower levels near the close. The two-year is up 0.8 bps at 2.8118%. The high yield reached 2.829%. The 10 year yield is down -0.2 bps at 3.0609% after trading as high as 3.087% intraday.
In the European debt market yields were mixed with Italian yields coming down sharply by -14.6 bps. The German 10 year yield moved up 2.6 basis points.
The data in the US came in mostly weaker than expected today:
- Initial jobless claims came in at the highest level in over 4 months at 224K. The expectations was for 215K.
- Durable goods orders came at - 4.4% versus -2.6% expected. The pieces were also not that great.
- Michigan consumer confidence was also weaker than expectations at 97.5 versus 98.3 expected
The existing home sales were slightly better than expectations of 5.22M vs 5.20M but for the year sales are down -5.1%. So good is really not so good for that release.
The US stock market was a bright spot for most of the day, but by the close, a lot of the gains were erased with the major indices closing at or near the lows for the day. Moreover, the S&P and Dow - which closed below the 2017 close yesterday - could not trade back above those levels intraday. The final numbers are showing:
- The S&P index closed up 8.04 points or 0.30% at 2649.93. That compares unfavorably to the high at 2670.73 The low was at 2649.82
- The Nasdaq closed up 63.427 points or 0.92% at 6972.25. The high extended up to 7029.92. The index didn't close relatively safely above its low as 6951.62.
- The Dow closed unchanged at 24464.60. That was well off the intraday high at 24669.79 and just off the day low at 24463.28.
That was not what you want to see if the "market" is trying to bottom. European shares did have a solid day with all the major indices up over 1% with the exception of the Portugal PSI20. Those indices closed near highs for the day. The US markets closed near the lows.
In Europe in the new day, Brexit will remain a risk event as the negotiators work on wording for a deal.
Below are the ranges and % changes of the major indices.
In the forex market today, the "risk on commodity currencies" were the strongest, while the JPY and GBP were the weakest. The USD fell the most vs the AUD, NZD, CAD and EUR, was near unchanged vs the CHF and GBP and higher vs the JPY.
Volatility in the EURUSD, GBPUSD, USDJPY and USDCHF were below the average trading range over the last month of trading (see lower chart below). The USDCAD, AUDUSD and NZDUSD had more normal trading ranges.
Some technical levels to eye in the new trading day:
- For the GBPUSD, the 100 hour MA stalled the rally on 4 separate hourly bars. That MA comes in at 1.28164. Stay below keeps the sellers in control. Move above and the bias tilts a little more to the upside. Lower targets are at 1.2722 (Nov. low), 1.2695 (Oct. low), 1.26612 (2018 low).
- The EURUSD traded above and below the 100 hour MA today and in the US afternoon, the price moved and stayed below that MA (more bearish). The MA comes in at 1.13955. Stay below an the 200 hour MA will be eyed at 1.13432. That is also the 50% retracement of the move up from the November 12 low.
- The USDJPY moved above its 100 hour MA (currently at 112.86) and apart from a few pip dip below after the weaker durable goods data, the price stayed above and is closing near the high (trades at 113.093). Going forward the 100 hour MA is a risk level for the buyers. The 200 hour MA at 113.32 (and moving lower) is a key resistance target on the topside.
- The NZDUSD stalled ahead of a topside trend line currently at 0.6964 and is trading just below its 100 hour MA at 0.6833. That MA will be set the bias in the new trading day. On a more bullish run, remember the 200 day MA at 0.6878. That MA stalled the rally last week. On the downside, the 200 hour MA is another level to target at 0.6797.
It is Thanksgiving tomorrow in the US. Typically it is quiet day but every day has the potential to surprise with Brexit, trade, and Trump wild cards.
Anyway, there is much to be thankful in my life this year. I will be celebrating with my brother-in-law (and my sister). Scott survived cardiac arrest that stopped his heart on 4 separate occasions about 3 months ago. I am thankful for his recovery, for my sister's efforts to save his life and for the first responders, doctors and nurses who took the baton and did the rest.
I am also thankful for my wife and my three sons, my parents, my siblings and all my friends including everyone who makes Forexlive a great place (yes that includes you all). Thanks!
