Session Wraps - Major Forex Headlines wrapped up by trading session

Author: Greg Michalowski
7

Forex news for traders on May 26, 2017.

In other markets today:

  • US yields ended marginally lower in holiday shortened trading: 2 year 1.293%, unchanged. 5 year 1.789%, down -0.4bp.  10 year 2.246%, down -0.8 bp. 30 year 2.912%, down -0.8 bp
  • US stocks ended with record closes for the Nasdaq and S&P but the changes were minimal.  S&P up 0.75 points or +0.03%. Nasdaq up 4.938 points or +0.08%. The Dow ended nearly unchanged at -2.67 points or -0.01%
  • Spot gold move up $11.50 to $1267.11
  • WTI Crude oil trades at $49.80, up $0.90 or+1.82%.  The price is closing above the 200 day MA at $49.52 but below the 100 day MA at $50.99 at the end of the trading week.
In the North American session today, US GDP revision for the 1Q came in higher at 1.2% vs 0.9%.  That will look better than the 0.7% that was the first stab at the release, but is still below the growth estimates for 2017. Nevertheless, at 1.2%, it is a more respectable showing for the quarter.   NY Fed Nowcast GDP guesstimate rose to 2.3% for the 2Q from 1.9% last week, while the Atlanta Fed GDPNow estimates a 3.7% 2Q number.  That is still a pretty good gap for the two Fed estimates (the market does not really react to either to be honest). 

Also released today was Durable goods orders which showed a -0.7% decline. This was still better than the -1.5% estimate.  Moreover the prior month was revised up to +2.3% from 1.7%. That's good news too.  The not so good news was the Cap Goods orders and shipments nondefense, ex air (always a mouthful) were not as good at 0.0% and -0.1% vs +0.5% estimates for both. 

Finally, the Univ of Michigan sentiment index for May (this is the final number) was revised a little lower to 97.1 from 97.5 estimate (and 97.7 last).  It is still near high levels going back to 2000, but remember, it is one of the "soft" data points (i.e. does not necessarily lead to higher GDP). 

The other event today was the G7 meeting. The headlines from a mix of heads of state suggests that the G7 communique on the environment will not include the endorsement of the US. That is not a surprise, but they like to have unanimous votes in the big picture items.  Trump did leave with an open mind (or so they say).   There were some serious talks about trade, with Trump promoting a more "fair trade" relationship with the other members.  All the nations were in agreement about fighting terrorism.  Those are the main talking points from the meetings in Sicily (or at least from the headlines). They will conclude tomorrow, and a shorter than usual official communique will be released

The activity in NY session off the data led to some of the JPY strength seen into the opening, being reduced. The JPY still ended the day higher with the GBPJPY up 1.51% (that was the biggest mover).  

The USD got a little stronger in the NY session, with larger gains against the GBP leading the way.  The GBP simply had a down day and although it is ending off the lows after a very modest afternoon rally, the pair is ending at around the 1.2800 level after being as high as 1.3041 at the start of the trading week. Today, the market did not like the poll results for the election.  Although they showed May, has a comfortable lead, they were perhaps not as wide as thought.  That and technical breaks, helped the downside gather trend momentum.

What are some of the technicals saying for the major US pairs (and going into next weeks trading)?

For the EURUSD, today, the pair extending the range for the week by less than 1 pip. Instead of a low of 1.11609, the low reached 1.11601 today.  Whoop-di-do.  For the week the low to high trading range was 108 pips. As a guide, the lowest range going back to mid 2014 is 106 pips. So that says a lot about the EURUSD in trading this week (i.e. not much was going on).   Non trending leads to trending, so we will be looking for something more in the new week.   On the topside, the 100 hour MA at 1.12085 (and moving lower) will be a hurdle to get above and stay above, if this pair is going higher (closing at 1.1176). That is the minimum.   ON the downside, the 1.1160 level is not far away but it was a floor this week.  Get and stay below it and there could/should  be more liquidation selling (we are still near high levels for this pair).  Of note from the CFTC commitment of traders released late on Friday was the longs in the EUR are the highest level since October 2014.  Are buyers keeping the bid in the pair? Will they be able to take it higher next week?....OR....Will the longs sell out (and push the price lower in the process)?

As mentioned, the GBPUSD had a trend like down day today.  That moved the price back down to test a support area defined by lows after the UK PM May called the election in mid April. There were 4 days from April 19 to April 25th where the day's low came in between 1.2769 to  1.2774 (there was one day that quickly moved to 1.27548 but it quickly rejected that break).   Today, the low stalled at 1.2774 and the pair is closing at 1.2797.  In the new week, the 1.2769-74 will be eyed as the key support again.  Move below (and then below the 1.27548 low) and the sellers are more in control for further selling (1.2688 would be a target below). If the price can get back above the old low (before today that is) for May (from May 4th) at 1.28295, the sellers are going to start to feel a little more uncomfortable. It might be that the pair's price just wanders to another key resistance area at 1.2860 (look for sellers at 1.2860), but you never know if the move back higher turns more serious.  1.2860 is a key resistance area for me in the early part of the week. 

The USDJPY trended lower into the NY session, but fear about stocks and yields which did not extend lower, stalled the fall and the data helped to support a corrective move back higher.  The price moved back above the 200 bar MA on the 4-hour chart at 111.32 in the NY afternoon session but that rally stalled too.  The price waffled into the close.  What we learned this week for the pair is that the 200 hour MA for the most part, put a lid on the rallies. That MA is at 111.558 and moving lower. It is also almost converged with the 100 hour MA at 111.538. If you want to earmark a technical level for next week, it will be those MAs. Stay below, is more bearish.   On the downside the low today stalled within a few pips of the low from Tuesday at 110.866. That is the key level on the downside for the USDJPY in the new trading week.

The USDCAD ends down on the day. Oil prices recovered a bit that helped to increase the CAD (lower USDCAD).  The selling took the price below the 100 hour MA at 1.3472 and back below a trend line on the hourly chart (see post here).  Both are potential early week ceilings that if the price stays below, is more bearish. If the price goes above, it may lead to a more corrective move higher.   Also of note in this pair is the commitment of traders report this week showed that speculative positions remain at record SHORT levels. The CAD has been rallying since peaking on May 5th. Are traders getting too long and will there be a bigger flush out?  That is the importance of a rally. If there is no rally, the shorts could get more nervous with the losing trades and bail out.  The short positions in the CAD, need to see some bottoming in the USDCAD. 

The NZDUSD squeaked out a close above the 200 day MA today at 0.70536. The close was at 0.70585. That was the 1st close above the 100 day MA since March 1st.   I will give the benefit of the doubt to the close (for a bullish bias), but we could easily go back below on Monday given the failure to move higher on Friday. So watch for momentum on a move below the MA level.  Until then, the buyers remain more in control with the 50% of the move down from the 2017 high at 0.7096 and the 200 day MA at 0.71065 the next upside targets.   

There is a lot of chop in the AUDUSD chart but at the low today (before the NA open), the price decline stalled at the 50% of the move up from the May 9th low at 0.74229.  The 100 bar MA on the 4-hour was also in the area at 0.74201 (the price closed at 0.7443).    Go below those level next week is more bearish (buyers today, will likely stop themselves out).  ON the topside, the 0.7466-70 sticks out as a level to get above and stay above. It corresponds with some swing levels going back to mid May on the hourly chart AND the 100 hour MA and 200 bar MA on the 4-hour chart is also near that level.  Get above should solicit more buying from traders.    

That does it for me. Wishing you all a good weekend.   For those on holiday in the US on Monday, remember the fallen soldiers and their families.   I know I will.  

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Below is a snapshot of the % changes of the major currency pairs against each other. The NZD is the strongest. While the GBP is the weakest.


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Author: Mike Paterson
4

Forex news for European trading on May 26 2017

News:

Data:

A data light session but with politics dominating we've seen some decent opportunities as yen demand prevails, oil rallies and the pound has another look lower. Gold rises to 3 week highs.

USDJPY opened trying to hold above 111.50 but general USD supply and risk-off yen buying has seen a steady slide down through 111.00 to post lows of 110.89 so far.

GBPJPY has once again been a prime mover down to 142.66 from 143.80

That supply has helped to cap cable along with EURGBP demand up to 0.8730 from 0.8695 and we've seen GBPUSD post 2-week lows of 1.2855 after 1.2890 highs

EURUSD opened just below 1.1200 but it wasn't long before it was spiking up to 1.1220 then 1.1235 before capping as EURJPY found fresh sell interest down to 124.35

Meanwhile USDCHF has held 0.9700 and one might reasonably suggest the SNB are lurking again as EURCHF retreats to 1.0885 from 1.0910 with CHF safe-haven demand in vogue too.

Oil has had a decent session with WTI up to $49.33 from $48.40 and that's helped push USDCAD down to 1.3433 from 1.3496

Gold has rallied to 3-week highs of $1268.30 as the risk-off sentiment prevails.

US durable goods and Q1 GDP the data risk at 12.30 GMT and G7 rhetoric to keep things ticking over too.

Lots more potentially to play out before the week-end finally arrives.             

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Author: Eamonn Sheridan

Forex news for Asia trading Friday 26 May 2017

On the news and data front we had Japanese inflation data, two Federal Reserve speakers, UK election polling. And yet ... none of it amounted to much.

A recent poll on the UK election put Labour within (behind) 5 points of the Conservatives, the gap is narrowing as we approach June 8. Is a Conservative loss conceivable? I don't think so but if we've learnt one thing on elections its not to have a closed mind (does not apply to cheering for your team, of course) . GBP was on the soft side for most of the session, the polling was cited (in the search for narrative :-D Maybe it did impact, but it took a looooong time to do so.) but a stronger USD was also a factor.

A stronger USD? Well, yes, for a lot of the session. EUR/USD fell, but has since recovered somewhat, USD/CHF popped, and CHF has since recovered somewhat. Cable has also bounced back a little, but as I update its under 1.29 and looking a wee bit heavy.

Put AUD into the 'weak' basket today, AUD/USD dropped with the USD strength and has not recovered much at all. It is barely off its session low as I update. I expect the weakness will continue for the next couple of weeks (AUD/USD traders - a quick heads up to the freak outs coming over the next 2 weeks). NZD is also on its session low against the USD, but is down only small on the day. USD/CAD is up a little too.

And so to Japan. It was Inflation Day (no, not a holiday ... but hey, why not?) Headline inflation was in line with consensus expectation, and 'core' inflation hit its best since April of 2015. But the one to watch, Japanese 'core-core' inflation (see here for a quick explainer if you need) registered a big fat egg ... zero % y/y ... again. If the BOj is targeting 2%, as they say they are, and will keep accommodative policy until its stable there, which they say they will ... then the data was yen bearish.

But ... nope, the yen found some strength today. USD/JPY is off 25-odd points, and yen crosses are down.

Gold gained a few dollars on the day (BTC was volatile but is net not much changed on the Asian session).

The "fall" out from the OPEC/non-OPEC agreement continued for oil, its down further on the session, taking a look below its overnight low.

Sell

the

fact

Right?

China was (relatively) calm today. The USD/CNY reference rate was set at a barely changed level from yesterday's mid-point. The PBOC injected a net 20bn yuan into money markets (nevertheless, yuan borrowing rates rose; overnight HIBOR to its highest since January ... so no let up from the PBOC tightening efforts). Iron ore is down around 1% on the session, it had been a touch lower.

Regional equities:

  • Nikkei -0.32%
  • Shanghai +0.09%
  • HK +0.05%
  • ASX -0.64%

GBP/JPY delivery service.

Have a great weekend all!

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Author: Adam Button
1

Forex news for US trading on May 25, 2017:

Markets:

  • WTI crude down $2.71 to $48.64
  • Gold down $2 to $1256
  • S&P 500 up 11 points to record 2415
  • US 10-year yields flat at 2.25%
  • USD leads, AUD lags

It was a wild ride for oil and bitcoin traders today but less-dramatic for the rest of the market.

In US trading, the euro ranged between 1.1190 and 1.1225. It had drifted down into that range from a high of 1.1250 in Europe. The comments from Constancio and the US economic data was generally ignored.

 USD/JPY ranged around 111.80 and that's where it finished.

Cable was under constant pressure after the GDP report. It rose above 1.30 but skidded down to 1.2950 and then made a could solid efforts at breaking yesterday's low of 1.2925. So far the efforts have failed.

USD/CAD fell a cent yesterday and gained 65 pips today. The drop in oil prices was the main driver for the gains up to 1.3475 from 1.3400 early in the day. Considering that crude was battered by $2.65, the moderate drop in the loonie is almost a victor for the CAD-bulls.

AUD/USD similarly struggled in a slide to 0.7454 from 0.7510. The damage was mostly done in Europe but some modest selling hit stops below yesterday's US low of 0.7455. The pair is limping to the finish line, along with most commodities.

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More session wraps for your convenience.

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