Forex news for NY trading on January 6, 2020
- US major indices close at session highs
- CFTC commitments of traders report. GBP longs are the largest long position since May 2018.
- US crude oil futures settle at $63.27
- Bitcoin consolidates gains after dip finds buyers
- Some geopolitical comments from China and France are hitting the news wires
- Former national security advisor Bolton to testify in impeachment trial if subpoenaed
- Iraqi PM: Told US both countries must work together to implement troop exit
- European shares end the session with declines
- NY Fed Nowcast revised to 1.2% (was 1.1%) due to omission on Friday.
- China's Global Times: US/China should not rush a phase one deal
- Pres. Trump: Iran will never have a nuclear weapon
- US Markit services PMI for December (F) 52.8 versus 52.2 estimate
- Hezbollah Brigades, Iraq: Will turn US airbase into rubble
- Advisor Conway: Pres. Trump confident he can still renegotiate nuclear deal with Iran
- Industrial product price index for Nov 0.1% versus 0.2% estimate
- The GBP is the strongest and the JPY is the weakest as NA traders enter for the day
Don't tell "the market" about geopolitical risks like Iran.
Now the day started with the weekend comments from the US, Iran, Iraq invoking some fears, but after opening lower in the stock market, buyers had entered and turned the fear around.
The NASDAQ index was down about -0.9% and is closing up 0.56%. The Dow industrial average was down about -0.75% and is closing up 0.24%. The S&P index is down -0.6% and is closing up 0.35%.
Yields which were lower earlier in the day (the 10 year was as low as 1.759%), and are ending modestly higher (the 10 year is trading at 1.800% at the day's end)
WTI crude oil was up at $64.72, but is currently trading at $62.81, down $-0.24 or -0.38%
Gold is trading up $13.60 or 0.88% at $1565.85 which is an indication of some fear. However, the high did extend to $1588.13, and the price is closer to the low price of the day of $1560.64.
In the forex market, although there was some flow into the safe haven of the Swiss franc, the safe haven of the JPY and USD was ignored. In fact, the JPY is ending the day as the weakest currency of the majors.
Fundamentally, the Markit services PMI and composite PMI data was a bit better than expectations but it did not have any lasting impact from the release.
Taking a look at the technicals are some of the major currencies into the close and new trading day, shows:
- EURUSD: The EURUSD was helped earlier in the London session by better PMI data in the EU. However, in the US session the pair traded in a 22 pip trading range with some of the price action above the sideways 100 hour moving average at 1.11877, and some of the price action below the same moving average. The pair is ending the day above the moving average currently trading at 1.11979. A break above the 1.1200-1.1202 area and traders will be looking toward resistance from the daily chart at the 50% retracement of the 2019 range at 1.1224. Also at the level is a downward sloping trend line. Key level on a topside going into the new trading day
- USDJPY: The USDJPY open lower but after the 1st few hours, the price started to climb higher with London resistance at the 100 day moving average at 108.168. In the New York session, as stocks rebounded the price moved above that 100 day moving average and continue through a higher trend line at 108.277. Ultimately the price extended up to 108.50 which was home to the 38.2% retracement of the move down from the December 26 high. The price has backed off of that level and currently trades at 108.375. Going forward into the new day, the 100 day moving average at 108.168 remains a key barometer on the downside. On the topside, the 38.2% retracement at 108.495 remains a key hurdle to extend above.
- GBPUSD: The GBPUSD was another pair that rallied in the London morning session but stalled at the 1.31737 level. The pair traded in a 40 pips trading range for the New York session with a retest of the high at 1.31737 forming a topside ceiling. On the downside, the 100 hour moving average sits at 1.31464 (the price currently trades at 1.31649). A move below that moving average should solicit more selling, but be aware that sellers in the New York session could not keep the price below that level on a corrective break lower (the low for the day reached 1.31326).
- USDCAD: The USDCAD his in the day near session lows at 1.29602. That was also near the low from Friday's trade. The low price from last week comes in at 1.29508. A break below 1.2960 and then 1.29508 should solicit more selling as the 3 day consolidation phase as traders looking for the next shove (lower or higher honestly). On the topside, the consolidation has allowed the 100 hour moving average to start to catch up with the price. That moving average comes in at 1.29945. THe highs from Friday and Thursday stalled just above the 1.3004 to 1.30087 area. If the 100 hour MA is broken, followed by the 1.30047-087 area, that should be more bullish.
