Forex news for traders on June 6, 2017.
- US stocks end the day with negative signs
- Comey will make White House uncomfortable but will stop short of saying President interfered - ABC
- Crude oil move higher in trading today. Settles up 1.67%
- Ray Dalio on Donald Trump and China FX policy
- Earnings call transcripts are a great job for big data
- Buy the ECB dip - BAML
- For good order...European stocks end mostly lower. 10 year yields lower too.
- Bernanke: The rise in sentiment surveys is overdone
- Mnuchin: US imbalance with China in trade a 'significant concern'
- USD: Continues to correct lower; what's next? - BTMU
- EIA raises 2018 US oil output forecast to above 10 million barrels per day
- Oil nears the best levels of the day as Qatar drama continues
- Technical analysis: Gold surges as rates fall
- New Zealand GlobalDairyTrade auction index +0.6% vs +3.2% prior
- ECB's Linde: Spain can grow faster than 3% in 2017
- April US JOLTS job openings 6044K vs 5743K expected
- Canada Ivey PMI comes in at 53.8 (SA) vs 62.0 estimate
- The reason behind the bond market rally? China
- Chart of the day: It's all about the yen, gold and bonds today
- The strongest and weakest currencies as NA traders enter for the trading day.
In other markets, a snapshot shows:
- US stocks were lower with the S&P down -0.28%, Nasdaq down -0.23% and the Dow down -0.23%
- US bond yields moved lower. 2 year 1.294%, 5 year 1.710%, -3 bp. 10 year 2.143%, -3.8 bp
- Spot gold surged $13.81 to $1293.24
- WTI crude oil $48.38, +$1.00 or 2.07%
NY traders came into the day with the US dollar down, and that trend continued in the NY session. The greenback was the weakest currency on the day. However, it fell the most against the JPY (nearly 1% decline). The next largest % mover was its fall against the NZD (-0.66%) and the AUD and CHF (at -0.32% for each).
Contributing to the dollars weakness was lower yields. There was a report overnight that said China was ready to buy more US notes. That helped to send bond prices to the upside. The 10 year traded at the lowest yield of the year at 2.1278%.
Falling yields also sent the price of gold higher. Gold traded at its highest level since the November US election (up nearly $14 near the close).
US stocks also fell modestly which helped contribute to the US dollars fall.
The only economic piece of data out the US was the JOLTS job report. The numbers from that Fed favorite showed that there are plenty of jobs to be had out there. Job openings surged to 6044k vs an estimate of 5743K .That is a lot of jobs and should ease the Fed's burden for a June rate hike. Despite the big gain, the US still moved lower.
Remember, although the action was pretty lively today, the big day is ahead on Thursday with the ECB decision, the ex FBI director Comey's testimony and the UK election. That is a big day. The action we see until then, could be partially impacted by the position squaring before those key risk events. That type of market, tends to encourage watching the technicals.
What are the technicals saying for some of the major currency pairs?
The EURUSD continues to have trouble getting above the 1.1284 and the 1.1300 high from the US election day. The high price today reached 1.12836. The bullish news is that in trading yesterday, the price low stalled near trend line support at 1.1234. In trading today, the price stalled within a few pips of the 100 hour MA. That MA is now at 1.12469. So buyers are buying against fairly shallow support levels. The problem is the overhead resistance. So traders are ping ponging between the levels. Look, and go with a break. There should be momentum in the direction of the break.
The USDJPY trended lower today and in the process fell below the 200 day MA (at 110.30 today). The fall stalled near support at the 109.18-22 area (the low reached 109.218 - see post here). The correction off that level in last hours of the NY trading, took he price to the 200 bar MA on the 5-minute chart at 109.55 (the high reached 109.587). With the market holding support, that increases the 109.18-22 as a key level in the new day. A break below will look toward the 109.00/08 area (50% of the move up from the August 2016 low), and then the lows from April 2017 at 108.51. On a correction higher, the 109.71 and 109.86 are the 38.2-50% of the move down today.
The GBPUSD gave back much of the gains from yesterday after stalling earlier in the day against trend line resistance. The low, however stalled right at the 200 hour MA and trend line support at 1.2870 and bounced. We are closing back above the 100 hour MA at 1.2886. With the 200 hour MA currently at 1.28675, a trend line on the hourly chart at 1.2875 (and going higher), the 100 hour MA at 1.2886, that area is support going into the new day. Stay above is more bullish.
The RBA kept rates unchanged and said an appreciating A$ would complicate economic rebalancing Well, the AUDUSD moved higher in the NY session after an up and down session in the Asian and London morning session. The price in the NY afternoon session moved through the 0.7500 level (see post here), but the 200 day MA at 0.75306 (and other key levels above that level) make for a minefield of resistance. However, we are above the 0.7500 level. If it can stay above that level, the bulls remain in full control. Move below and there could be some rotation lower.
With US interest rates lower today, spot gold surged by about $14 near the close (see post here). The move to the upside was able to briefly get above the April high at $1295.65 (the high reached 1296.22. However, the break did not solicit a lot of buying and the price rotated a touch lower into the close (trading at 1293.78). Into the new day, the 1295.65 remains a level to get and stay above. If it cannot get back above that level (and there may be sellers putting a lid on it now), there is the potential for a rotation back lower.
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Below is a snapshot of the % changes of the major currencies vs each other. The JPY was the strongest, while the USD was the weakest.
