Session Wraps - Major Forex Headlines wrapped up by trading session

Author: Greg Michalowski

Forex news for NY trading on February 23, 2018.

A snapshot of other markets near the end of week is showing:

  • Spot gold down $-2.94 or -0.22% at $1329.26
  • WTI crude oil futures are trading up $.89 or 1.34% at $67.28
  • Bitcoin - the thing that never closes - is traded at $10,000 up $84 on the day. 
Good golly! The stock market reminded me of a lot of days in 2017. Today the major indices soared from 1.39% for the Dow to 1.77% for the Nasdaq. The S&P did ok with a gain of 1.60% at the close.   

The catalyst? There was no economic data out of the US, but there was some Fed members speaking and the Fed's Monetary Policy Report - a report prepared by the Fed ahead of Fed Chairs testimony next Tuesday. The Fed comments and the report did not scare the market into thinking a tighter than expected Fed was on the horizon (i.e more than 3 hikes in 2018).  What you know does not really scare you.  Plus yields were heading back down.  

  • 2 year 2.238%, down -1 basis point
  • 5 year 2.618%, down -3.7 basis points
  • 10 year 2.866%, -5.5 basis points
  • 30 year 3.154%, -5.2 basis points
Later toward the close, one of the hawks on the Feds board, John Williams spoke, and although he spoke a little more hawkishly about the economy, he did say that "the Feds guidance calls for gradual rate hikes and he expects that too".  That's not scary.  The market can certainly handle 3 tightenings, and lower rates today were a relief.  

Now, it was a good day for stocks and bonds (if you were long both), but the markets are not necessarily out of the woods. 

For example, the S&P index still remains below its 200 hour MA at 2755 and the yields remain nearer multi-year highs (the 10 year traded at the highest yield since January 2014 earlier in the week).  In addition, treasury auctions this week, got a combined grade of "C", indicative of slowing demand just when the supply is coming to the market.   However, for the day at least, the stock and bond markets were on fire (or at least very warm).  

How did that translate into the forex?

The USD is ending the day higher but off the highs for the day. That is in the aggregate. However, it was mixed overall. The greenback rose the most vs the NZD (up 0.67%). That was interesting as retail sales in NZD were reported better than expectations.  The dollar lost the most vs the CAD (down -0.53%). At least in Canada, higher than expected CPI was a fundamental reason to buy the CAD.  Having said that, the earlier tumble in the USDCAD (higher CAD) was nearly all the way reversed before moving back down into the week's close.  

The other pairs vs the dollar saw more modest changes with gains of 0.32% vs the AUD, 0.31% vs the EUR and 0.28% vs the CHF. The GBPUSD and the USDJPY were nearly unchanged at the end of the day/week.

So it was a day for the stocks and bonds. 

Next week, the forex market will get to hear from the new Fed Chairs mouth for the first official time when he testifies on Capitol Hill on Tuesday (that is moved up from Wednesday).  Wishing you all a happy and healthy weekend and thank you for your continued support.   

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Author: Mike Paterson

Forex and Bitcoin news from the European morning trading session 22 Feb 2018

Mostly been a steady session but it's the pound grabbing the spotlight with some fast n frantic fat finger action.

Early USD demand faded as USDJPY failed into 107.20 and retreated to 106.85 and that saw GBPUSD reverse early losses down to 1.3925 and start a steady climb to post 1.3995 just shy off good offers and recent highs at 1.4000.

We paddled around a bit until 11.00 GMT (also a London fixing time) when, bam, the pound fell rapidly with GBPUSD down to 1.3903 from 1.3980, EURGBP up to 0.8839 and GBPJPY down to 148.64 among other pairs.

No prime movers noted so maybe fix/early month-end related but it wasn't long before we were back through 1.3950-80 to test 1.4000 again and EURGBP finally dropping through 0.8800. Keep up at the back!

Elsewhere EURUSD has been pinned around 1.2300-10 with some decent option expiry interest as too has USDCAD around 1.2700 with CPI data t 13.30 in focus too

Equities opened a little firmer and Bitcoin has staged a mini revival back through $10000

A few CB talking heads to follow on what might be a lively end to the week.

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Author: Eamonn Sheridan

Forex and Bitcoin news for Asia trading Friday 23 February 2018

Not a huge day of movement in the forex, but some minor wiggles.

Today brought Japanese CPI data for January. The Japanese government is getting this data published a week prior to what it used to, kudos to them. The 'Tokyo' inflation data will come out next Friday. As for the data, the 'core-core' reading was a beat, in at +0.4% y/y (expected +0.3%) but still way below target and still plenty of work for the Bank of Japan to do.

The yen response was very limited indeed. USD/JPY is a few points higher on the session while EUR/JPY is barely changed.

EUR/USD has come down a few points. There was little in the way of news nor data for it, though we did get comments from ECB's Smets (see bullets above).  Along with lower EUR the AUD/USD and NZD/USD are also down on the session. NZD is the biggest loser (against the USD as well as on crosses). We got some positive retails sales data for it early in the session, but the currency is down despite the news, cross sellers notably weighed. As I update it is on its session low, as is AUD/USD.

These two weaker 'risk' currencies stand in contrast to better signals from regional equities; Japan, China, HK, Singapore, Australia all up on the day.

News from China today ... Anbang group has been bailed out, government authorities stepping in to run the show (see bullets above).

Still to come

Have a great weekend all!

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Author: Greg Michalowski

Forex news for trading on February 22, 2018

In other markets, a snapshot near the close is showing:

  • Spot gold up $6.98 or 0.53% at $1331.51.  The precious metal got a boost from the lower dollar
  • WTI crude oil futures is trading up $1.04 or 1.69% at $62.72. A surprise draw in inventories helped to send the price to the upside
  • Bitcoin is trading down $-362 and is trading back below the $10,000 level at $9920.  The low price extended to $9715 on the day.
  • The S&P closed higher by 0.10%
  • The NASDAQ index closed lower by -0.11%
  • The Dow industrial average closed higher by 0.66%.
In the US debt market today, the US treasury auctioned off 29 billion of seven-year notes. The demand was so-so. Yields in the USD are lower. 
  • 2 year 2.25%, -1.6 basis points
  • 5 year 2.655%, -3.0 basis points
  • 10 year 2.917%, -3.3 basis points
  • 30 year 3.203%, -1.7 basis points
European stocks today closed mixed. For a review click here.

Economic data released in the US today was not bad.

The initial US jobless claims came in at 222K versus 230K expected. The 4- week moving average continued its fall lower and stands at 226K.  

Later in the US morning session, the leading index came in better-than-expected 1.0% versus 0.7% estimate. Going back to January 2017, there have only been 2 months where the index was less than 0.3%.  The last 4 months have come in at 1.0%, 0.6%, 0.4% and 1.4%. I guess things continue look good for the US economy. 

The better data did little to help the US dollar. The sum of the % declines of the major currencies was -0.62 at the start of the NA session. Near the end of the day, the sum of the % changed totaled -2.91 (see table below). The greenback lost value in the US session despite what was better data.

Technicals played a role in the greenbacks decline. 

The USDJPY was the big decliner for the day. The dollar fell -0.96% against the JPY.  Technically, the pair fell below its 200 hour MA after moving above the MA level yesterday and holding support against it for most of the day yesterday and into the London morning session. The 200 hour MA is now risk for shorts. Stay below is more bearish. It comes in at 107.076 currently.  

The EURUSD moved above a downward sloping channel trend line at 1.23119. The break sent the price up toward the 100 hour MA (currently at 1.2349).  As we head into the new day, the price remains above the broken trend line at 1.2300 level but below the 100 hour MA at 1.2349 (the current price is at 1.2328).  The dip buyers are looking for more corrective upside (we are up on the day), but unless the 100 hour MA is broken, the bears can still lay claim to the move down from the Feb 16 high. 

For the GBPUSD, the pair moved lower initially into the London session, but found support at a lower trend line at 1.3856. That gave the buyers the go ahead to take the price higher.   The run took the price up past the 200 and 100 hour MAs (currently at 1.3968-70) and to a high of 1.3988, but the stops triggered above the MA were short-lived and the pair is ending the session below the two MA at 1.3956.  If going higher, a break of the MAs at 1.3968-70 will be needed. 

The USDCAD got a shove higher on the back of much weaker retail sales (see report here). That pushed the price of the USDCAD above the 200 day MA at 1.2714 (it is at 1.27055 in the new day) and to a high of  1.27518.  However, the US dollars overall weakness weighed on that pair today, and the selling took the price back lower. The pair is closing below the MA at 1.2702.  

The USDCHF was higher in the Asian Pacific trading but stalled right at the swing high from Feb 9th on the hourly chart at 0.9408.  Stopped on the level. The fall from that peak, took the pair back down to the 100 and 200 hour MAs at 0.9318 to 0.9336 and the price selling stalled.  In the new day, traders will look for a break either above the 100 hour MA at 0.9336 or below the 200 hour MA at 0.9318. 

Dollar weakness in the face of better data.  The technicals helped lead the way.  

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