Forex news from your trading for November 9, 2016
- Stock indices up but not the major techs
- PIMCO's Mather - Says less chance of a December rate hike from Fed now
- Forex technical analysis: EURUSD moves to new session lows
- Mitch McConnell laid out five priorities for the new administration
- RBNZ cuts rates 25 basis points, as expected
- Mitch McConnell says TPP won't be brought up in lame duck session
- Well, that was dramatic. What's next?
- Fed's Kashkari: Sees US GDP at around 2%
- The biggest loser today by far was fear
- US 10-year yield hits 1.99%
- Have you all had fun on the stock market rollercoaster?
- ECB's Visco: Italian recovery is ongoing but failing to gain pace
- Paul Ryan says he spoke with Trump and "our relationship is fine"
- Atlanta Fed GDP Now unchanged at 3.1%
- This is the ‘Trump didn’t really mean it’ moment
- US EIA weekly oil inventories +2432K vs +2000K expected
- September 2016 US wholesale inventories final 0.1% vs 0.2% exp
- We ain't paying for no stinking wall says Mexico
- Mexican Central bank: Will take steps needed to preserve inflation
Other markets today:
- S&P index +1.1%,, NASDAQ composite index +1.1%, Dow industrial average, +1.4%
- 10 year note yield 2.0681%, +21.3 basis points
- Spot gold +0.17%
- Crude oil futures, +0.8%
- Strongest currency GBP. The weakest currency AUD
The day after Donald Trump became the 45th President of the United States, traders put on their trading shoes and rallied stocks while tanking bonds.
Stocks rallied on the back of expectations that decreased regulation, increased fiscal spending, lower corporate taxes would increase US growth As for the bonds, higher deficits, stronger growth, higher inflation and more fiscal policy could mean more Fed tightenings Time will tell. The story is just being written, but the Dow was down as much at -800 points and ended up 256 and 10 year bond yields reached 1.7145% before soaring to 2.0882%. So if anything, President elect Trump brought with him a whole lot of volatility on day 1.
How did the USD fair?
The dollar is ending the day higher on the day - rising against all the major currency pairs with the exception of the GBP. Higher rates - and less Trump fear - were the driving force for the greenbacks rise.
Versus the EURUSD, the pair is ending the day at the lows for the day near 1.0900. The road to that spot first required a 275 pip spike higher before a reversal of nearly 400 pips. The NY session was good for about 180 or so pips of the 400, with little in the way of corrections. It may not have been fast, but it was steady. Technically, the lows from October at 1.0849 will is the next target. The support between 1.0777 and 1.0821. The close resistance for the pair in the new day will be eyed at 1.0981 to 1.1000. The 1.0981 is the 100 bar MA on the 4-hour chart. The 1.1000 is .....well 1.1000.
The USDJPY was him another pair that went to the brink...only to reverse, and recover all the downside move. What did that entail? The fall from the overnight high to the overnight low was 427 pips. The recovery took the price up 470 pips to a 3+ month high of 105.88. In the process, the pair moved above a trend line connecting highs going back to March 10 at 105.20 currently. It also moved above the October high at 105.52 (closed at 105.64). Stay above that area keeps the buyers happy and in control, with the next major target at the 200 day MA at 106.58.
The RBNZ lowered rates to a record low level of 1.75%. The NZDUSD rallied after the announcement. Gov Wheeler put the odds of another cut at about 20%. He was concerned about the currency level, and that he was open to intervention. That helped to reverse the gains and send the pair toward support at the 200 hour MA (at 0.7267). The low price stalled at 0.7269 near the US close. That MA held support earlier in the day. Finding support twice at the level, increases the pairs importance going forward. ON the topside a move back above the 100 hour MA at 0.7323 will be eyed for clues.
The USDCHF was a mirror image of the USDJPY today. At first there was a flight into the relative safety of the CHF (USDCHF tumbled) on Pres Trump fears. That sent the price tumbling to a low of 0.9548. That move was reversed as stocks recovered, bond yields soared and the dollar was bought. The price ended trading near high levels at 0.9846 - a near 300 pip move off the lows.
Pres. Trump = increased market volatility (at least on the 1st day).
