Forex news for July 8, 2016.
- US stocks end the day little changed/mixed
- Feds Meister: Fed not behind the curve
- Plan your trade: A look at the key levels for the EURUSD through US employment report
- WTI crude settles at $45.14 BBL.
- Reuters poll: Bank of Canada to leave rates on hold at July 13th meeting
- GBPUSD continues the march lower.
- North Korea says US sanctions crossed Red Line
- ECB Constancio: We trust that we will achieve normalization on inflation levels
- Oil nears triple bottom after plunge on inventory data
- Michael Gove eliminated from UK Conservative leadership
- QE dream team assembling next week
- EIA US weekly oil inventories -2223K vs -2500K expected
- Growth in Chinese FX reserves a surprise
- Moscovici says EU finance ministers to confirm EC sanctions on Spain/Portugal
- More workers join Nigerian oil strike
- EU ministers to vote on Spain and Portugal deficit sanctions on July 12
- Canada June Ivey manufacturing PMI 51.7 vs 51.2 expected
- NIESR UK GDP estimate for quarter ending in June: +0.6%
- Why the New Zealand dollar is higher today (and what the market could be missing)
- Initial jobless claims 254K vs 269K expected
- Canadian May building permits -1.9% vs +1.5% expected
- June US ADP employment +172K vs +160K expected
- Take a shot in the ForexLive Non-farm payrolls competition
- ECB Minutes: Negative impact of Brexit could be significant for Eurozone
- June 2016 US Challenger layoffs 38,536 vs 30,157 prior
Oil prices fell sharply.
The ADP employment report pointed toward a rebound in NFP in June.
Initial jobless claims were not bad either and suggest a decent jobs gain too.
The only thing keeping traders from really being bullish the dollar is the surprise from last month that hurt traders with similar feelings going in. Fool me once....You know the saying.
So the dollar saw up and down activity for today, but ended mostly up in most of the currency pairs with the exceptions being the NZDUSD and the USDJPY which did their own things.
In the NY session it seemed like the GBPUSD was the dog for the day, but it actually was just taking back the gains from the Asia-Pacific and London morning session. Those earlier gains did see the GBPUSD move up about 120 pips, only to give it all up (and a little more) by the time of the close. Baring a recovery over the next 16 or so hours, the pair will be trading below 1.3000 heading into the jobs report. Today's close is the lowest since June/July 1985.
The EURUSD was lower today and remains below resistance above against the 100 and 200 hour MAs and the 200 day MA (all between 1.1091 and 1.1102 currently. The pair is closing at 1.1060). Over the last 8 trading days, the pair has been confined to 162 pips. That is pretty narrow but we are now post Brexit, we are in the July 4th week and with global uncertainty, unless the number is a big rebound, the Fed is still likely to keep the rates where they are at come the July meeting later this month. Nevertheless, it is ok to think "Break Away" tomorrow. For a plan, see my video of key levels (and "why's to go with it), by clicking here.
As for the USDJPY today, it bucked the dollar trend and moved lower in the NY session. Perhaps it was driven by the inability to move above the closing level from yesterday and/or trend line resistance at 101.18 area. As a result traders were forced to sell. The selling did not dry up until the low from the Asian Pacific session was reached at 100.59 area. We are ending around 100.75 which is still pretty close to the 100.00 level that many at the beginning of the year would have not expected to be in the mix in 2016. Yesterday we got within 20 pips.A weak number tomorrow could lead to headlines that talk of sub 100.00 levels for the first time since November 2013.
NZDUSD was another pair that bucked the dollar trend. That pair rallied early in the day on the back of comments from Grant Spencer - #2 in charge at the RBNZ. Adam wrote a great synopsis of the reasons here. IN the NY session, although the price did not really go much higher, it did not go much lower either.
Despite better Ivey PMI data, the USDCAD - which was lower earlier - reversed higher on the back of lower oil prices and more positive technicals. The rally did stall against the 100 day MA at the 1.3014 level. The price moved above that MA in June and again on Wednesday this week, but there has not been a close above the MA since Feb 24, 2016. We head into the US AND Canada employment report trading right around that MA. Something will give way tomorrow and we should move away.
