Forex news for North American trading on October 8, 2020
- Major indices close higher for the 2nd straight day
- Fed's Rosengren: More QE still worth weighing despite limited gains
- Biden to have Townhall in Philadelphia on October 15
- White House Farah: Trump wants skinny coronavirus relief bill
- WTI crude oil futures settle at $41.19
- More from McConnell: Big portion of GOP think enough done on aid
- Senate Majority Leader McConnell: Economy is still struggling
- More Kaplan: US needs more fiscal help especially with high joblessness
- Pres. Trump says Covid medicines will be available immediately
- Fed's Kaplan: We are growing out of this deep hole of the 2Q
- US treasury auctions off $23 billion of 30 year bonds at 1.578%
- Trump campaign wants debate on October 22 and October 29th
- More from Pelosi: We want to help airline workers
- Fed's Rosengren: Need more precautions for financial stability risks
- Maj. European indices end the session higher.
- More from Pelosi: There is no a standalone airline bill without bigger aid plan
- Politico: Mnuchin floated restarting stimulus talks with Pelosi
- Barnier told to stick to mandate to uphold current levels of fishing access for EU
- Kudlow: Still need targeted coronavirus aid bills
- BOC Macklem: We are not in active discussions on negative rates
- Feds George: The new inflation framework is a tolerance for inflation above 2%
- US initial jobless claims 840K vs. 820k estimate
- The AUD is the strongest and the GBP is the weakest as NA traders enter for the day
The initial jobless claims remain stubbornly high. Although the number of jobs claims was the lowest since March 13 week, they still remain above 800,000 (29 weeks above 840K now). That is a high number each and every week. The previous high had been 665K back in March of 2009.
Is it good news that continuing claims came in lower than expectations and declined by 1M in the current week?
Sure.
However, the bad for that series is that those workers continuing to receive unemployment claims is still close to 11M. The high water mark for that in 2009 was at 6.6M.
The discussion the numbers highlight is "Does the US need more fiscal stimulus?"
Today, Senate Majority Leader McConnell said that although the economy was still struggling, he also said that a big portion of GOP think enough has been done on aid.
House Majority Leader Pelosi is sill looking for a bigger comprehensive deal. She dismissed the Pres.'s new idea of a piecemeal deal saying an airline bailout has to come with a bigger aid plan.
The president is pretty much all over the place. Earlier this week he called of negotiations for a stimulus deal, then hours later promoted the idea of piecemeal stimulus. In late comments today, he told the House Minority Leader that he wanted a "big deal".
Things will get interesting tomorrow when Pres. Trump hosts a virtual rally on the Rush Limbaugh show.
The ups and downs (and somewhat erratic behavior) has Nancy Pelosi saying she will discuss the 25th amendment tomorrow which discusses the transfer power to the vice president if the president is removed. Never a dull moment and expect more fireworks between now and November 3 (and perhaps beyond).
Meanwhile over at the Federal Reserve, the Fed presidents and governors are fairly consistent in the belief that fiscal policy is needed especially for those who are still suffering.
In the markets, the major stock indices are not fazed by the political roller coaster with all the major indices closing higher. The S&P index led the way with a 0.8% gain. The NASDAQ index rose by 0.5% and the Dow rose by 0.43%. It was the 2nd gain in a row and the 3rd gain in 4 days this week.
In the forex, the CAD was the strongest, helped by higher oil prices. WTI crude oil rose by $1.32 or 3.3% to $41.27.
The weakest of the majors was the EUR. The USD today it is ending the session weaker with declines mainly against the CAD, AUD and GBP. The greenback closed near unchanged levels vs. the EUR, JPY, CHF and NZD.
Technically speaking:
EURUSD: The EURUSD tumbled lower in the early New York session but found support buyers against its 200 hour moving average and 38.2% retracement of the move up from the September 25 low. The rising 200 hour moving average currently comes in at 1.17382. A move below it - and the 38.2% at 1.17325 - would be needed to tilt the bias more to the downside. Having said that, traders are testing the 100 hour moving average at 1.17596 at the day's close. If sellers can hold below that level, a rotation back toward the 200 hour moving average may be in the cards. A move above the 100 hour moving average and the high from today and yesterday at 1.1781 would be the next key upside target.
USDJPY: The only thing you can say about the price action in the USDJPY today was it was non trending. The ranges around 17 pips from high low. The your trading range is only 11 pips. At some point the price will break out and look to trend. Recall that the pair broke above the 10 day swing high at 105.797 yesterday and has remained above that level since that time. A break back below that level and the rising 100 hour moving average currently at 105.761 would be more bearish.
USDCAD: The USDCAD trade to its lowest level since September 18 and in the process cracked below the 50% retracement of the move higher since September 1. That level comes in at 1.32056. The current price is trading at 1.31967. In the new trading day stay below the 50% midpoint would tilt the bias more to the downside for this pair.
USDCHF: The USDCHF really traded above its 200 hour moving average for the 1st time since September 30, but quickly reversed. The pair rotated down to retest its 100 hour moving average currently at 0.9166. That level will be a barometer for buyers and sellers in the new trading day. Stay above and the buyers hold onto the intraday control with a move back above the 200 hour moving average at 0.9187 as the next target. Move below the 100 hour MA and the sellers take back control.
