FX News for North American trading on July 5, 2016
- US stocks and the day lower. NASDAQ hit the hardest.
- Forex trading video: EURUSD falls below 200 day MA.What next?
- Aussie election counting continues today - still no result as yet
- Brexit fallout - 3 big asset managers have halted trading in real estate investment funds
- Fed's Williams says he hasn't changed his outlook much on Brexit
- All about 1.30 today
- Stephen Crabb withdraws from Conservative leadership contest
- Fed's Dudley: US economy is doing 'ok on average'
- Goldman Sachs on post-Brexit trade ideas
- WTI crude oil headed for largest drop since February, what's next
- Liam Fox eliminated in first conservative vote
- Cable bounces from 1.3000
- GBP/USD touches 1.3000
- European equities fall hard
- FBI director found 3 Clinton emails not turned over containing sensitive info
- Economist poll sees 80% probability of BOE rate cut before year end
- Fonterra New Zealand GlobalDairyTrade price index -0.4%
- German bund yield hits record low at -0.17%
- The IBD/TIPP Economic Optimism index 45.5 vs 48.3 estimate
- May US factor orders -1.0% m/m vs -0.8% m/m expected
- ISM NY 45.4 vs prior 37.2
- Theresa May is the overwhelming favourite to become PM - poll
- Let's get some things straight about Brexit
The story today was back on the GBP. The GBPUSD fell sharply and dipped below the 1.3000 level (low to 1.2999 - lowest level since June 28, 1985) before a modest corrective rally in the NY afternoon session. The pair is currently trading at at 1.3030 as we head into the NY session's home stretch. For those who like the technicals (like I do), the 1.3020 area is a trend line connecting lows from July 2015 to lows from Jan 2016 and Feb 2016. By the way, BOE Carney was talking more accommodation which helped get the ball rolling lower and lower. Uncertainty from BREXIT remains in the forefront of traders minds.
The EURUSD was supported in the early part of the NY trading day by a pretty good run up in the EURGBP (moved up to 0.8547 - the highest level since October 2013). That rally stalled and the price of the pair rotated back to the 0.8490 level before leveling off. The helped to push the EURUSD lower in New York afternoon trading session. In the process, the price fell below the 200 day moving average at the 1.1096 level.That is now topside resistance for traders heading into the new trading day. Stay below and the seller remain in control. Move above and the waters are muddy again for the pair.
The USDJPY was the beneficiary of flows into the relative safety of the JPY as stock markets were generally under pressure. Stocks in the US did end off the lows, however, and that led to an afternoon rally in most currency pairs with a JPY in its currency pair name - although only modestly. The GBPJPY was biggest moving currency pair of the day - falling by 2.72%. It may have stalled at the lows, but I cannot say it bounced very much.
The USDCAD, NZDUSD and AUDUSD each moved about 1% to 1.10% vs the greenback with the dollar being the stronger. The USDCAD was helped by oil prices which were down as much as 5% on the day. The dairy prices in NZD showed a modest decline and that helped to keep the pressure on the pair (but honestly it was already on the way down). The AUD is suffering from the prospects of coalition government. Eamonn's been all over this story. From a trading perspective, the uncertainty and the overall flight out of risk, has led to a decline into technical support against the 200 hour MA at 0.7450. The 100 day MA is at 0.7446 too. This area is a key support level for the AUDUSD as the new day begins.
Bond yields continue to move lower. New lows in German bund and US 10 and 30 year bonds as well.
US Factory orders fell -1% vs -0.8% expected. IBD/TIPP economic optimism was hit by Brexit/global fears and a correcting stock market last month.
Feds Dudley said the US is "doing ok on average". That pretty much says it all. Fed's Williams has not changed his mind much on Brexit.
Good fortune with your trading in the new day
