Forex news for US trading on October 5, 2016
- US major stock indices in the day modestly higher
- Goldman Sachs are still sellers of GBP - forecast and target
- Everyone is brushing aside the ECB news but the first reaction is always denial
- USDJPY inching up towards the 100 day MA
- US crude oil futures settle at $49.83/ BBL
- Fed's Lacker spreading his hawkish cheer. Signs inflation is heating up
- ECB: 'Reducing QE is not tapering' - Barclays
- Is SNB establishing a de facto floor in EUR/CHF? - BAML
- Schaeuble wants to cut taxes by €6.3bn per year - Handelsblatt
- Renzi behind in Italian referendum poll
- European stocks mostly finish with minor losses
- Atlanta Fed's GDP Now unchanged at 2.2%
- ECB's Angeloni says some EU banks need to address problems quickly
- Barclays on the ECB and tapering that's not tapering
- WTI crude oil nears $50 after inventory report
- EIA weekly oil inventories -2976K
- US August factory orders +0.2% vs -0.2% m/m expected
- US ISM Non Manufacturing Composite for September 57.1 vs. 53.0 estimate
- Markit September final services PMI 52.3 vs 51.9 expected
- The US trade balance for August -40.7B vs. -39.2B estimate
- Canada August trade balance -$1.94B vs -$2.45B expected
- The strongest and weakest currencies as NA traders enter for the day
The US data today was a bit better with the US non-manufacturing ISM index rising to the highest level since October 2015 (index moved to 57.1 vs. estimate of 53.0). In addition US factory orders for the month of August came in better than expected at +0.2% (Est. -0.2%).
The better data helped the dollar inch higher although admittedly nearly all the gains came against the JPY and the NZD which continue to weaken. Changes for the day against the EUR, GBP, CAD and AUD were near the 0.0% line with up and down price action.
Some highlights for some of the favorite pairs.
The USDJPY traded at the highest level in nearly a month (going back to August 6th). In the process the pair moved closer to the all important 100 day MA at the 103.766 level. Traders live the 103 35-57 as support in the new day. If it holds look for the bullish move to continue in this pair as it works off oversold conditions for the year. Other targets, 105.32 and 106.70 (see technical commentary HERE).
The GBPUSD - although little changed on the day - did trade at new 31 year lows (to 1.12684). At the lows, the price did get close to a lower trend line level (fell short by about 10-15 pips). The rebound off the lows will be having trader eyeing the 1.2791 level as a key topside level to stay below. That level corresponds with the July 2016 low (for a technical view of the GBPUSD CLICK HERE).
The rebound in the GBPUSD was helped by the EURGBP reaching it's own technical resistance target area defined by trend lines on the four-hour chart and daily chart. Holding that resistance at the 0.8843 area gave traders a reason to take a breather in the bullish run and take some profits (Click HERE for the technical discussion).
The commodity currencies all tested some key levels and held on corrective moves. That leaves the door open for a battle in the new trading day in each. To take a look at the levesl in play for the NZDUSD, the AUDUSD and the USDCAD, click here.
In other markets today:
The major indices in the US were up modestly with the S&P index up 0.43% NASDAQ up 0.5% and the Dow industrial average of 0.62%.
US bond yields were higher by around two basis points across the yield curve.
Crude oil futures rose by 2.16% and spot gold was near flat on the day.
The charts bellow show the % changes of the major currencies vs each other. The CHF was the strongest as it rose against all major currencies. The JPY was the weakest.
