Forex news for NY trading on July 27, 2018
- US stocks end in the red. Nasdaq continues its slide.
- CFTC Commitments of Traders: JPY shorts increase
- Pena Nieto hopes accelerated NAFTA talks could get deal in August
- WTI crude oil settles at $68.69 /BBL
- OMB's Mulvaney: Confident 4% is manageable for long-time
- What's priced in for the major central banks and how it changed this week
- Baker Hughes US oil rig count 861 vs 858 prior
- S&P 500 threatens to trace outside reversal. Five reasons for the decline
- European stocks end the session with gains. Up on the week too
- New York Fed GDP Nowcast sees Q3 at 2.83% vs 2.38% last week
- Not good day for old Harvard buddies yesterday. Facebook and Bitcoin take hits.
- NAFTA: Mexico economy minister says have agreed to start on less complex issues
- US July final University of Michigan consumer sentiment 97.9 vs 97.1 expected
- Trump: As the trade deals come in, growth will be a lot higher
- This has to be the real-life equivalent of riding a 100-banger
- US Q2 advance GDP +4.1% vs +4.2% expected
- The JPY is the strongest and the CHF is the weakest as NA traders enter
A snapshot of other pairs into the week's close shows:
- Spot gold $.52 or 0.04% at $1223.12
- WTI crude oil futures down $.58 or -0.86% at $69.01
- Bitcoin reversed earlier declines and is trading back above the $8000 level. It is trading up $78 and $8218. The digital currency trades in between it's 100 day moving average at $7611 and it's 200 day moving average at $8549. For a technical look at bitcoin, CLICK HERE
Below is a global snapshot of how some of the major stock indices fared this week. THe German DAX was the biggest gainer at 2.3%. The US NASDAQ composite index was the biggest decline are at -1.06% as some of the US leading technology stocks got hit (Facebook, Intel, Twitter as example)
In the US debt market today, yields were lower.
For the week,
- 2 year yield moved from 2.593% closing level from last Friday to a closing level of 2.669% this week. That is a gain of 7.6 bps
- 10 year yield moved from 2.893% closing level from last Friday to a closing level of 2.957% this week. That is a gain of 6.4 bps
Today, the market finally got the 2Q GDP numbers. It seems like the market has been anticipating this quarters GDP since....well the first release of Q1 GDP back in late April. Around that time the first guesstimate of the GDP numbers started to be released. Lo and behold, the NY Fed GDP estimate for 3Q rose to 2.83% from 2.38% last week. Here we go again.
Anyway, growth for the 2nd quarter came in at 4.1% which was right around the consensus of 4.2%. However, perhaps with the Pres. whispering 4.8% earlier in the week, the "market" was more looking for something like that.
Nevertheless, the number was good enough for Pres Trump and Co. to blare the trumpets, and come out with lots of statistics like it was the highest growth in 13 years (that statistic needed to be clarified and is a bit questionable), that trade advanced $50B (it may be all soybeans but who cares) and loads of others that fit the story line.
The bottom line? It was 4.1% annualized and was led by a robust personal consumption gain of 4.0% (expected 3.0%).
So the dollar and interest rates moved higher and the stock market applauded?
Not quite.
In fact, yields were lower on the day, and the dollar fell. Stocks also declined You can blame some bearish sentiment started by Facebook yesterday and continues with Twitter and Intel today.
Later the University of Michigan sentiment rose to 97.9 final from 97.1 preliminary. It still did not help the dollar or lift rates./stocks.
That's why I like to say, "Pay some attention to the chart..."
EURUSD: The EURUSD this week did move lower (dollar stronger) and for today traded to the low for the week at 1.16195. However, it rallied higher in the US session and ended higher on the day. Near the highs, the pair tested the midpoint of the move up from the July 19 low at 1.16617 and stalled. The price is closing not far from that level. The range this week was a small 130 pips. That was the lowest trading range for any week this year. Look for the market to get tired of the range and move next week (see post here).
USDJPY. The USDJPY pip range for the week was worse than the EURUSD. It came in at 96 pips. That was good enough for the 2nd most narrow range week for the year (the low is 86 pips on July 1. Today, the high price was able to trade above the 100 hour MA (at 111.087) but the pair moved below the level after the release and stayed below for the rest of the day. That MA will be a target to get above in early trading next week, if the buyers are to make a play for a rebound higher. If not, a move below the week's lows at 110.58 will help confirm more downside potential
GBPUSD. Keeping to the "narrow range for the week" theme, the GBPUSD range was 142 pips. That was just above the 2018 low range of 141 pips. Still noting to write home about. What levels are key for a break and move next week? The 100 week MA is around 1.30733. The low this week reached 1.3071 (on Monday). The low today reached 1.3079. If the price is to go lower, that 100 week MA needs to be broken. On the topside, the pair is trading around the 200 hour MA at 1.3105 into the close. The 100 hour MA is above at 1.3135 (the high on Friday could not get to that MA - reaching a high of 1.31305). Get above both the 200 and then the 100 hour MA will be needed to start to think about potentially turning the bears/sellers into buyers.
USDCHF. The USDCHF rallied toward the 1.0000 level before the data today (high reached 0.9978. The 50% of the recent move down from the July 19 high came in at 0.99716. The price stalled and the data sent the price down. The fall on Friday, took the pair right down to the 200 hour MA at 0.99332. Buyers stalled the fall and the pair is settling between the 200 hour MA below (at 0.99332) and the 100 hour MA above (at 0.99548). For your trading strategy, use a break of either of those MAs as bias clues. Move above the 200 hour is more bullish. A move below the 100 hour MA is more bearish. It is as simple as that.
NZDUSD. I know the USD went lower today, but there was a late day sell off in the NZDUSD that brought the pair back nearer to unchanged levels. One thing that helped to push the price was the US stock market. Some afternoon selling in stocks weighed on the "risk" pairs like the NZDUSD. In addition, technically, the 100 hour MA held resistance at 0.6799 (call it 0.6800). Remember that level next week. If the NZDUSD is to go higher, it must be broken. The pair settled near the 50% midpiont of the range since July 19th at 0.6781. A move below that level should be an indication that sellers are taking even more control.
USDCAD. The USDCAD fell below a trend line on the daily chart on Wednesday and below the swing high from March 2018 at 1.3124. That was bearish. The low this week stalled at 1.3023 on Wednesday and consolidated between 1.3093 and 1.3023 on Thursday and Friday. Down below is the 100 day MA at 1.2958 and moving higher. If the price is going lower, break 1.3023 and look toward the 100 day MA. If the price is going higher, that 1.3124 needs to be busted. If not, the sellers will stay in control.
AUDUSD. The AUDUSD is a bunch of ups and downs. In the middle of the range is the 50% retracement at 0.7390. Just above that is the 200 hour MA at 0.7394 and just above that is the 100 hour MA at 0.74039. That area between 0.73904 to 0.74039 is the neutral zone in the early trading next week. Move above the 0.74039 and look for higher levels (and momentum). Move below the 0.73904 and look for more selling.
Below is a snapshot of the strongest and weakest today.
Wishing you all a happy, healthy and safe weekend. Do something nice for someone.....Greg
