Forex news for North American trading on August 25, 2021
- S&P and NASDAQ close at record highs
- WSJ: Biden plan calls for Covid boosters at 6 months versus 8 months previously
- US Sec of State Blinken: There are less than 1K Americans seeking to leave Afghanistan
- WTI crude oil futures settle at $68.36
- Semi-conductor conductor shortage set to worsen into year-end and perhaps beyond
- U.S. Treasury auctions off 5 year notes at high yield of 0.831%
- Bitcoin rises back toward $49,000
- European major indices close modestly higher
- UK covid cases rise to the highest since July 20
- The bond market wakes up. US 10-year yields hit the highest since Aug 13
- EIA weekly US oil inventories -2979K vs -2683K expected
- EU will discuss re-imposing travel restrictions on Americans
- Belgian business confidence +7.6 vs +10.1 prior
- Canada July wholesale trade flash estimate -2.0% m/m
- US July durable goods orders -0.1% vs -0.3% expected
- The USD is the strongest and the CAD is the weakest as NA traders enter for the day
The USD started the North American session as the strongest of the major currencies, but the gains started to be whittled away as the day progressed. Gains in the USD vs the EUR, GBP, AUD and NZD, were reversed to losses by the bell. The NZD was the strongest of the majors, while the JPY ended as the weakest. Below is the ranking of the majors near the close for the day.
Any catalysts?
Durable goods came in around expected with revisions. The durable goods numbers tend to be volatile and the released today was the preliminary (will be rise with factory orders in a few weeks time).
I can't say that lower interest rates led to the decay. In fact, rates moved steadily higher today with the 10 year up 5.9 basis points to 1.349%. The low yield reach 1.283% toward the start of the day.
Crude oil did move higher once again settling at $68.36 after trading as low as $66.91. The price rose for the third straight day and may have contributed to some dollar declines.
Gold, however, moved lower today.
US stocks closed higher extending the win streak to 5 days for the S&P and Nasdaq and 4 days for the Dow. Moreover, both the S&P and NASDAQ close at record levels.
Technically speaking there was some catalyst for a lower dollar:
- EURUSD: The EURUSD - like yesterday - try to trade back below its 200 hour moving average at 1.17315, but failed quickly. That failure turn sellers in the buyers and the rest of the North American session was spent moving to the upside (with new highs made in the last hour of trading at 1.17738). Along the way the price also moved above the 38.2% retracement of the move down from the July 30 high. That level comes in at 1.17569. Stay above that level going forward keeps the hopes for further upside corrective probing in play.
- GBPUSD: The GBPUSD, like the EURUSD, moved lower in the early North American trading, but fell short of the low from yesterday at 1.36928 (the low reached 1.36959). When the price moved above its 200 hour moving average at 1.37335, and its 38.2% retracement of the move down from July 30 high at 1.37472, the pair saw increased buying momentum. In the new trading day that 38.2% retracement and 200 hour moving average will be a risk/bias defining level. Stay above is more bullish. Move below and the buyers will become frustrated.
- AUDUSD: The AUDUSD in the North American session found support buyers near its 200 hour moving average at 0.7240. Staying above gave the buyers the go-ahead to push higher with the high for the day reached 0.7279. That move extended the price above its move down from the August 4 high at 0.72659. The midpoint will be a short term bias defining level in the new trading day.
- USDCAD: The USDCAD had an up and down day with the early Asian session low at 1.25864. The high reached near the beginning of the North American session, stalled at 1.2643. The rest of the North American session saw the price rotate back down toward the low for the day the 1.2580 to 1.2596 area is a key swing area going back to August 6 time period. If the price was below that level, there should be more downside probing with the 200 day moving average at 1.25461 as the next key target.
