Forex news for US trading on October 6, 2016
- US stocks end the day mixed but little changed
- Goldman Sachs on why the pound is set to continue falling
- Crude oil futures settle at $50.44 per barrel
- We have been down this road before....
- BOE's Carney says monetary policy has been overburdened
- French stats office undercuts government forecasts
- Bank of Canada Wilkins: There is still material slack in Canada economy
- Reports on ECB taper are not correct says ECB's Constancio
- Gold runs into strong support around 1250 technical analysis
- Reuters: Oil leaders to meet for informal talks next week
- Weekly EIA Natural Gas storage 80 BCF vs 72 estimate
- Canada FM Morneau: Monetary policy has its limits
- Barriers ahoy in GBPUSD
- Forex technical analysis: USDJPY above the 100 day MA for the 1st time since February
- UK's Hammond says any Brexit deal must be mutually beneficial
- ECB's Praet: We need to be wary about adverse effects of low rates
- Lagarde: Brexit situation unfolding has been mild not adverse
- US's Jack Lew sees more willingness to use fiscal space
- Don't expect any new decision at informal oil talks in Turkey says OPEC source - Reuters
- US initial jobless claims 249k vs 257k exp
- A big cable seller is wot done it
- US Challenger job cuts Sept yy -24.7% vs -21.8% prev
The USD was the strongest currency today one day ahead of the US employment report. That report will be released at 8:30 AM ET, with expectations of 172K (vs 151K). The unemployment rate is expected to remain unchanged at 4.9%. Average hourly earnings are estimated to rise by 0.3% – a jump from 0.1% seen last month.
The US dollar strength today was held by weakness in the pound sterling once again. Sellers took the GBPUSD to yet another multi decade low of 1.2601. That low was right at a trend line support line on the hourly chart (see chart below). A move below will look toward the 1.2550 level where the underside of an old trend line cuts across. Resistance is up at 1.2666. Sellers remain in firm control as sentiment remains bearish for this pair on implications from Brexit (see Goldman's take HERE).
Other GBP pairs are also feeling the pounds pressure. EURGBP did correct in the midday NY session but has rebounded back toward the high at the end of the day.
The USDJPY also has continued its dollar bullish trend. In trading today price moved above the 100 day moving average for the first time since February 2, 2016. It also moved above the 104.00 level for the first time since September 5th. The September 2 high of 104.319 is the next hurdle to get to and through and behind that the 105.23. When the pair moved down from a 2016 high of 121.60, a move above 104.00 does not seem like that big a deal. What will be key for traders sentiment, however, will be to stay above the 100 day MA at the 103.67 area.
The EURUSD fell down toward the weeks lows at the 1..1137 level (the low reached 1.1139). I say "fell" but it really "wandered" slowly. Nevertheless, the pair did manage a 73 pip trading range for the day (above the 65 pip average over the last month of trading). That's the good news. The bad news is the week's trading range remains at a really low 106 pips. If that held up through tomorrow, that would be the lowest trading range since the summer of 2014. Of course we do have employment tomorrow. So there should be an extension, right? Whether we get it before the report remains a mystery. Let's just say, there is room to roam should there be a break in the new trading day.
In other pairs:
- The USDCHF moved above it's 200 day MA at 0.9793. Stay above is more bullish
- The USDCAD traded above and below the 200 day MA at 1.32087. The Canada employment report will be released tomorrow with expectations for net change in employment of 7.5K and the unemployment rate to remain steady at 7.0%.
- The AUDUSD fell below MA support at the 0.7593-0.7600 area. Stay below keeps the sellers in control. Move back above and the could see some covering
- The NZDUSD fell below the 100 day MA briefly at 0.71473 but that break failed. Is the bottom in for now?
The US major stock indices were mixed with the S&P up marginally (up 0.05%) and the Nasdaq down by -0.17%.
Crude oil futures closed above the psychological $50 level (trading at $50.59). US debt yields were up by 2-4 basis points.
US data showed that weekly initial jobless claims continue to point toward steady job increases (249K vs 257K estimate). Canada building permits rose by a greater than expected 10.4% (estimate 1%). The prior month was revised higher as well.
Below is a snapshot of the % changes for the day of the major currencies vs each other.
To all the FXL supporter from the Asian Pacific session, enjoy your day and your weekend.
For those FXL supporters in Florida, GA, SC, find a safe location away from the coast and take cover from the wrath of Hurricane Matthew. Don't mess with mother nature. Be safe.
