Forex news for NA trading on February 27, 2018
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- US major indices ending the day at session lows
- We could find out today who the new PBOC governor will be
- Video: Central banks have it all wrong
- Bill Gates: I think cryptocurrencies are "super risky"
- Cable vulnerable again as Brexit snags resurface
- US crude oil futures settle at $63.01/BBL
- Bitcoin remains higher on the day, and above the 200 hour MA
- The Bernanke and Yellen Show is LIVE now
- Fed discount minutes show vote to leave rate unchanged was 11-1
- The trick to making a great deal is to fudge the numbers
- Powell hearing ends. What we learned
- Powell: Waiting too long to hike poses risks
- Powell: When we were talking about the 'recent volatility' we were talking about the stock market
- Stocks continue the fall on Powell comments. S&P approaches MA support.
- The NZD is the weakest currency today but is approaching a key support target
- TD: Canadian dollar short is our favourite trade
- The European stocks marginally lower at the close
- US dollar jumps higher on consumer confidence, Powell optimism
- Atlanta Fed GDP Now estimate for 1Q growth comes in at 2.6% vs 3.2% last
- Forex technical analysis: Watching 1.2275-79 in the EURUSD now. How come?
- Fed's Powell: We haven't not made a long-run decision on using IOER to manage rates
- US Feb Conference Board consumer confidence 130.8 vs 126.5 expected
- Richmond Fed manufacturing index for February 28 vs. 15 expected
- The US debt management strategy for the past decade has been bizarre
- US Dec Case-Shiller 20-city house price index +6.30% y/y vs +6.35% y/y expected
- Barnier says there are significant differences on Brexit transition deal
- Fed Chair Powell: Sees further gradual rate hikes, outlook remains strong
- US advanced goods trade balance -74.4B vs -72.3B expected
- US January durable goods orders provisional -3.7% vs -2.0% exp
- Weidmann says ECB interest rate guidance is "rather vague"
- The CHF is the strongest. the NZD is the weakest ahead of the Fed Chair testimony
A snapshot of other markets as the day unwinds in the US shows:
- Spot gold is down $14.76 or -1.10% at $1318.90. The higher dollar today helped to push the precious metal lower
- WTI crude oil futures are trading down by $1 or -1.5% at $62.89.
- Bitcoin is trading up $294 at $10,670. The digital currency is above the 200 hour MA at $10,352. The 50% retracement of the move down from the Feb 20 high comes in at $10,549. Stay above each will keep the buyers in control.
There was a lot of data out today:
- Durable goods orders came in weaker than expectations at -3.7%. The pieces of the release were also weaker.
- The US events good trade balance also was weaker with a higher-than-expected deficit of -74.4 billion. For an administration focused on trade deficits, this is going in the wrong direction
- Case Shiller home sales came in about as expected for the 20 largest cities in the US
- US Richmond Fed manufacturing index blew away the expectations rising to 28 versus 15 expected.
- US wholesale inventories were stronger than expectation, which is good for growth (as long as it is voluntary).
Overall, although there was some good and bad in the economic data today, the tilt was to the negative. That was reflected in the Atlanta Fed GDPNow forecast of 1Q GDP which saw the value fall to 2.6% from 3.2% (the low mark for the estimate).
Offsetting the negative from the data, was the virgin testimony of Fed Chair Powell on Capitol Hill. His comments were released ahead of his appearance at 8:30 AM ET and had limited impact as the market digested the remarks.
However, when he was asked about the path of rates going forward (i.e., the dot plot), he said that there are a lot of things to make him believe things are better off than when they last did it in December. He cited specifically better economic data, the tax cuts, better global growth, hopes for better exports and others. Moreover, he sounded confident about higher wages going forward.
That was the catalyst for rates going higher - the 10 year moved to a high of 2.9227%, up about 6.5 basis points at the peak. It turned stocks to the downside and gave the dollar a boost.
The US stocks ended the session at the lows of day with declines of over 1% for all the major indices. The S&P index closed back below its 200 hour MA at 2755 area.
The dollar is ending the session as the strongest currency of the day (see chart below).
For some of our favorite pairs:
- The EURUSD is ending the session near the low for the day at 1.22007. There is swing low support from lows in January and February at 1.2202-11. If the price is able to get below that level the January 18 low at 1.2164 and the 50% of the move up from the December 11 low at 1.21358, will be targeted. A move above the swing low from last week at 1.2259 will be the minimum for the buyers to put some pressure on the shorts.
- The USDJPY moved up to a high of 107.67. There is a triple swing top at the 107.89 level (from Feb 14, and two swing highs on the hourly chart on Feb 21). The price came off that high into the close on the stock decline, but is still above the 50% of the move down from the last weeks high which comes in at 107.13. Stay above that level keeps the buyers a little more in control.
- The AUDUSD close near the lows at 0.7782. Not far from that low is the 200 day MA at 0.77802 and the 100 day MA at 0.77699 (in the new day). That is a key barometer for bulls and bears in the new trading day. Buyers should lean against the key MAs but if broken, look for the dip buyers to bail and sell.
- For the NZDUSD, on the hourly chart, a lower trend line cuts across at the 0.7220 area. going back to Feb 9 and Feb 12 swing lows stalled at 0.7226-31. That area at 0.7220-31 will be eyed for dip buyers in the new day. Like the AUDUSD, there may be buyers at the support, but if there is a break, look for them to turn around and sell too.
