Forex trading news for April 4, 2017
- US stocks squeak out gains in the major indices
- GBPJPY holds the support but needs more traders...
- No charges will be brought against Fed's Lacker
- WTI Crude oil futures settle at $51.03 /BBL
- FOMC Lacker: Resigns over improper disclosure
- Snapcharts: EURJPY finding support near its 200 day MA/trendline
- Forex technical analysis: GBPJPY bases at a nice technical level
- Atlanta Fed US GDPNow unch at 1.2% after today's data
- Yen pairs wind up and Europe winds down
- UK's Hammond: Some people want Brexit talks to fail
- Spanish navy patrol ship made an illegal incursion into Gibraltar waters
- Trump's infrastructure Bill may be more than $1tn
- US Commerce Secretary Ross: Continue to be focused on trade imbalances
- US healthcare talks are back on the table
- If you think the EURUSD range is narrow this week, look at the USDCHF.
- New Zealand dairy auction GDT price index 1.6% vs 1.7% prior
- February 2017 US factory orders 1.0% vs 1.0% exp m/m
- ECB spent €7.767bn in new €50 notes last week in latest QE count
- March 2017 US ISM New York business conditions current index 56.5 vs 51.3 prior
- A technical deal on Greek bailout is possible in coming weeks says EU's Moscovici
- Canada International Merchandise Trade for February -0.97B vs +0.60 est.
- February 2017 US trade balance -$43.6bn vs -$44.8bn exp
- The strongest and weakest currencies as NA traders enter for the day
In other markets today:
- Spot gold is trading up $3.28 to $1256.53
- WTI Crude oil is trading at $51.12. That is above the 100 day MA and 50% retracement at $50.97 (see post).
- US stocks squeaked out gains: S&P rose +0.06%. Nasdaq rose 0.07%. Dow was up 0.19%
- 2 year yield 1.252% up 2.6 bp. 5 year yield 1.888% up 3.6 bp. 10 year 2.360% +4.1 bp. 30 year yield 2.999%, +4.6 bp
Today, Richmond Feds Jeffrey Lacker resigned effective immediately. The resignation was on the back of admitting his role in leaking confidential Fed information about FOMC policy in 2012 to Medley Global Advisers. The news does not materially effect the current FOMC - Lacker is a non-voting member on the board this year and he was to resign later in the year. However, it is a black eye to the Fed and that may have an impact on the rope given the Fed to operate. You also wonder why it took so long to uncover the culprit. BTW Lackers lawyer has stated that his client will not be facing any criminal charges as a result of his transgressions.
In other news today, the US trade numbers came out with a lower than expected deficit. Any deficit is of interest to Trump and his advisors, in particular Commerce Secretary Wilbur Ross.. Also with China President Xi due for a visit to the White House South over the weekend, the China trade deficit of $31.7 billion (the total deficit was $43.6B), those sorts of numbers will be somewhat hard to explain away. Exports to China were $10.5 billion and imports were $31.7 billion. How friendly will Trump be? What will China's response be?
Factory orders in the US came out as expected at 1.0%. US Durable goods orders were revised to 1.8% from 1.7% prior.
In trading action today, the US dollar gained against the NZD, AUD and GBP, but was little changed at the end of the day against the other major currencies. That is how things ended. For the first part of the day the JPY pairs were lower (higher JPY) on the back of fears about stocks and perhaps a continuation of a further deterioration of the US stocks. That did not materialize. Technical also played a role in the recovery of the JPY pairs.
For the USDJPY, the pair fell below support in the London morning session below swing levels defined by 110.61-72. The breach sent the pair to a low of 110.26, but the pair could not reach the lows from last week. There was a modest recovery that has seen the price move back into and even above the aforementioned area. In the NY afternoon session, the price could not correct back below that area. So nod goes to the buyers at least as long as the price remains north of the area.
The GBPJPY is another pair that has seen a corrective move higher (albeit marginally). For it, the price bottomed just ahead of the key 200 day MA at 137.04 (low reached 137.085. Staying above is more bullish. Moving below in the new trading day is more bearish going forward. Closer support into the new day will come against the 100 and 200 bar MAs on the 5-minute chart at 137.72 and 137.57 respectively. Be aware.
The EURJPY also tested its 200 day MA today. That MA comes in at 117.677. The low today reached 117.42 but is closing above that MA line (see post here). For this pair, getting above the 50% of the weeks two day slide this week at 118.23 is the next target. ON the downside, the 100 bar MA at the 118.00 level is close support.
The EURUSD ended the 2nd day in a row with a range well below the 22 day average. Yesterday the range 39 pips. Today the range was 42. For the first 2 days of the week, the range is 46 pips. The 22 day average for one day is about 70 (but heading lower with the low volatility of late). The price action today fell below a trend line at the 1.0646 level in the London morning session but recovered back above. The high from Monday at 1.06807 would extend the trading range in the bullish direction. At some point there should be some attempt to extend the weeks very narrow trading range.
On Monday, the GBPUSD fell on the back of some weaker ISM data. The fall did stall yesterday and the Asian session today started with a modest rally to test the 200 hour mA. at 1.2489. After the market peaked against that 200 hour MA level, a new downward move started. The price fell below the 100 hour MA (currently at 1.2475) and the selling did not stop until reaching the 100 day MA at 1.24159. The low reached 1.2418. Good enough. The market consolidated in up and down trading for the rest of the trading day. On the topside,the 100 hour MA at 1.2475 is the next key level to get to and though IF the pairs i s to go higher.
Below is a snapshot of the % changes of the major currencies vs. each other. The JPY is the strongest today, while the NZD is the weakest.
