Forex news for US trading on October 4, 2016
- US stocks end the day in the red
- US Crude oil futures settle at $48.69/BBL
- No support for gold as decline extends to $42 in worst fall of 2016
- Forex technical analysis: GBPUSD fall slows
- Meanwhile over in the NZDUSD....
- Meanwhile over in the USDJPY....
- EURUSD basing at old resistance after ECB story
- EURUSD back down at the 100 day MA (a 2nd time).
- ECB exit plan or exit signal?
- ECB: Draghi made clear tapering hasn't been discussed - Livesquawk
- Even cable is getting in on the ECB act
- I'm selling that ECB headline
- EURUSD pops on ECB tapering comments
- ECB said to near consensus on need to taper QE before it concludes - euro jumps
- Forex technical analysis: NZDUSD falls on the GDT auction results
- Vancouver home sales fall 32.6% y/y in September
- BOE's Saunders: BOE forecasts were too pessimistic
- New Zealand GlobalDairyTrade auction price falls 3.0%
- ECB QE count: Bought $11.55bn vs €15.41bn in PSP last week
- September 2016 US ISM New York business conditions 49.6 vs 47.5 prior
- Forex technical analysis: EURUSD flirting with the 200 day MA. Is the train in motion?
- IMF's Obstfeld: The global economy is going sideways
- Fed's Lacker says he would have dissented at Sept FOMC
- IMF cuts 2016 US growth forecast to 1.6% from 2.2%
- IMF: Global growth forecast unchanged at 3.1% for 2016
- Gold tumbles on break of August low and $1300
- Brexit's Davis: Brexit success would mean unfettered trade relations with Europe
- Evidence has been mixed on the effects of QE says Lacker
- Bill Gross: Endless central bank doubling down won't end well
- The strongest and weakest currencies as NA traders enter for the day
- Fed's Lacker: Policy rate should be at least 1.5% by now
No US data today, but Fed's Jeffrey Lacker (non voting member) was in early in the session with hawkish comments. He is a known hawk, but with the USD being better bid from the action in the Asian Pacific and London morning session, it was another kick to the upside for the greenback.
The EURUSD moved lower on the flows - and coupled with some bearish technical breaks - the price fell until hitting the 50% retracement of the move up from the June low. That level came in at 1.11377. Support buyers stuck a toe in the water at that level, and were successful in slowing the decline. Little did those dip buyers know that there would be a bullish Bloomberg headline saying the "ECB was near consensus on need to taper QE before it concludes". The pair shot up - ultimately squeezing to a high of 1.1238. When some skepticism started to surface with regard to when "conclusion" date would be (it could be March or 2020 after all), and word came from the ECB that tapering QE had not been discussed, the price turned around and headed lower. Support was found against the 100 day MA at the 1.1180 level (the low reached 1.1176) and the pair traded mostly sideways for the rest of the day (the 100 hour MA and 100 bar MA on the 4-hour chart kept a lid on the pair at 1.1212. Those two levels (1.1180 on the downside and 1.1212 on the topside) will be levels for traders to lean against in the new trading day.
The GBPUSD had another bearish day today. In fact, the pair traded at the lowest level in 31 years - taking out the July 2016 low of 1.2791. The ECB fireworks did provide for a sympathy bounce for a brief moment (up to 1.2769) but when the pair could not get close to the old 2016 low, the sellers came back in and forced the price lower. EURGBP also turned around and pushed the price to the highest level since February 2013. That helped keep a lid on the GBPUSD. In the new trading day, the 1.2689 level is lower channel trend line target for the pair. A break below will likely trigger stops.
The USDJPY was another big mover in trading today. The buying started in the Asian Pacific session and continued for much of the day. A technical trend line break on the daily chart at 102.06, was a technical catalyst for the upside momentum. Fundamentally, talk of BOJ buying foreign bonds as way to weaken the JPY was a contributor as well. The high in the USDJPY extended to just short of the 103.00 level (high reached 102.96), where topside trend line (see post here) and an option expiration (at 103.00) stalled the rally. Corrections have been relatively modest, however. Longer term with the pair unable to move much below the 100.00 in 2016 despite bearish projections (there has only been one closing day below the parity level ) and the high for the year way up at 121.68, should there be even a small technical correction, there is room to roam higher. At the least the 100 day MA at 103.79 should be on traders radars for a test in the not so distant future (that MA is moving lower and the price has not been above it since February 2016).
Commodity currencies got hammered in trading today mainly on the back of Gold getting destroyed. The precious metal fell over 3% on the day (down $43.00). That coupled with bearish technicals, helped to send the AUD, NZD and CAD all lower.
For the NZDUSD, the pair stalled near the 0.7200 level. This was a low water mark going back to mid-August. That level will be eyed in the new trading day (see post here).
The USDCAD rallied to the upside and stalled just ahead of the 200 day MA at 1.32185. Key level in the new trading day. Crude oil ended the day marginally lower (down -0.37% as I type).
The AUDUSD fell below the 100 and 200 hour MAs and fell to the 38.2% of the move up from the September 12 low at the 0.7607 level. Support buyers leaned against the level. A modest correction took the price to 0.7624 into the last hour of trading.
Hope all have a wonderful new trading day.
