Forex news for New York trading on January 25, 2017
- Record closes for the US stock indices
- Trump: We are in a crisis on southern border
- US crude oil futures settle unchanged on the day
- USDJPY tests the key MAs...again
- Forex Technical Analysis: 5 currency pairs in 5 minutes
- Gold falls back below the $1200. Down about 1% on the day
- US sells 5-year notes at 1.988% vs 1.980 WI bid
- Trump EU ambassador candidate says he'd short the euro
- US EIA weekly oil inventories 2840K vs 2500K expected
- Forex technical analysis: GBPUSD moves above 100 day MA. First time since....
- Dow 20K. 10-year above 2.5%. USDJPY tests 100 and 200 hour MA.
- There goes 20k in the Dow
- November 2016 US FHFA HPI 0.5% vs 0.4% exp m/m
- The strongest and weakest currencies as NA traders enter for the day
- US MBA mortgage purchase index up 6% at 243.2 w/e 20 Jan
In other markets:
- S&P index up 0.80%
- Nasdaq up 0.99%
- Dow up 0.78% and cracks and closes above 20K for the 1st time ever
- Bond yields are higher: 2 year up 4bp to 1.236%, 5 year up 4.3 bp to 1.976%, 10 year up 5 bp to 2.513%
- Spot gold is down $8.13 to 1200.69
- Crude oil is trading at $52.85 in after hours trading, down -0.32%
The day belongs to the Dow. I know it is an antiquated index of only 30 "industrial" stocks. I know the broader S&P and Nasdaq is more reflective of the market... BUT it has been flirting with the 20K level for the last month and a half without getting above it. Today it broke through and closed above for the 1st time ever. What does it mean? Well, it will get headlines globally. There will be the stories explaining "How come?" Those stories will focus on the the changes in Washington and how Trump has not even talked about tax cuts, or major regulation changes. Imagine when he "makes do" on those promises? PS the Nasdaq and the S&P closed at record highs as well today.
What else moved?
Interest rates moved higher but they probably won't write about that in the newspapers (I mean online), or talk about it on the evening news. The US 10 year yield moved back above the 2.50% level to a high or 2.537% (it is back down to 2.513%). If all these good things are to happen, it could increase inflation which could lead to tighter monetary policy as the Fed plays "catch up"/
What else moved?
Gold moved lower by $8. If rates go up the price of gold tends to go lower (or so they say).
What else moved?
The US dollar went higher because when stocks go up, the dollar tends to benefit. Also when bond yields go up the dollar goes up and when gold goes down, the dollar goes up. That is the way it has been working at least.
But did the dollar go UP? NO. The dollar was mostly lower today. In fact the dollar fell against all the major currency pairs with the exception of the AUD. That pair was hurt in the Asian Pacific session after lower than expected inflation, and traded as low as -67 pips. However, by the close the AUDUSD was only down about -11 pips. So even that currency did not have THAT bad a day against the greenback.
Why was the dollar down? Perhaps the dollar is forward thinking and discounting that higher rates and the general higher dollar, will be a drag down the road. Another story might be that all boats (i.e., overseas nations) will rise in the rising Trump tide - even if he wants to rule the world. Heck, even the MXN rallied strongly today. That is not supposed to happen.
A third story might be some very favorable technical clues that were bearish for most of the currency pairs... Below are some of those stories.
EURUSD. The EURUSD tried to go lower but continues to run into support against the rising 100 hour MA at 1.0720 currently. Also the 1.0706 level (38.2% of the move down from the election day high) held support at the low today. If the price can not go lower, it has to go higher. The 1.0777 remains as a key hurdle to get to and through IF the buyers are to remain in control.
USDJPY. The USDJPY has tested the 100, 200 or the combination of the two on 4 separate occasions this week. Each time the MA line has stalled the rally. If you can't go higher, you have to to lower. The most recent test occurred in the NY afternoon session at the 113.88 area. The pair is trading at 113.24 at the close. Higher interest rates and higher stocks did not help the pair.
GBPUSD. The GBPUSD moved above the 100 day MA for the 1st time since June 24, 2016. That would be Brexit day. That MA comes in at 1.2532. There was a sniff of the level in the NY session (low reached 1.2549) but that was as close as it could get. The price closed up at 1.2631 - nearly 100 pips from the MA level. PS the GBP was the strongest currency today.
USDCAD. The USDCAD fell to the 200 day MA today and stalled above and below the level. In the late NY morning session, the "market" started to lean more against the 200 day MA line (at 1.3106) and the pair started to move more to the downside. It is closing at the 1.3068 level.
Those are some of the technical stories for some of the major currency pair (watch the video I did on these pairs and more by clicking here).
Overall, the typical relationships like yields and gold and stocks, did not really do much for the dollar. However, the technicals sure told the alternative facts about why the dollar went lower in trading today. PSS. If you think the dollar will turn around and get in sync with the other markets, the levels that held support/held resistance will need to be broken eventually.
Below is a snapshot of the % changes of the major currency pairs vs each other for the day.
