Forex news for trading August 22, 2016.
- US major indices are mixed at the close
- The idea of a Fed 'dovish hike' is back - Deutsche Bank
- Crude oil futures settle at $47.05
- USDCAD stretches to new highs. AUDUSD little changed in up and down day.
- Mexico cuts GDP forecast to 2.0% - 2.6% range in 2016
- France's Hollande: Extra push needed for European economy
- Forex trading: EURJPY moving up and down between support/resistance
- USDCAD breaks above 100 day MA. Scoots higher.
- EU stock closes lower to start the week
- Japan plans 3.2869 trillion Yen supplementary budget to finance Abe stimulus
- Dollar finding sellers as the London fix approaches
- US stocks positive on the day
- Forex technical analysis: What's going on in the GBPUSD?
- Forex technical analysis:USDJPY and EURJPY bounce
- Forex technical analysis: USDCAD stalls near 100 day MA
- ECB Public sector bond purchases EU980.5B in current week
- US stock opening lower. S&P down -0.27%
- Forex technical analysis: EURUSD trades at London session highs
- Forex technical analysis: USDJPY eyes 100 hour MA
- Chicago Fed National Activity index comes in at 0.27 vs 0.20 estimate
- Canada wholesale trade sales for June come in at +0.7% vs +0.1% estimate
- The strongest and weakest currencies as NA traders enter for the day
The below charts show the % changes of the major currencies (i.e. USD, EUR, GBP, JPY, CHF, CAD, AUD and NZD) vs. each other. For the Daily % Changes of the USD, it shows the change from Friday vs. the EUR is up 0.03%. That is not much of a change. The bigger changes come against the CAD and the GBP. The dollar is stronger against the CAD by 0.61% and weaker against the GBP by 0.48%.
The same pattern can be said for the EUR, the JPY, the CHF, the AUD and the NZD. All have small changes vs each other but are stronger against the CAD and weaker against the GBP.
Guess what? The GBP and CAD were the currencies in play today. The others may have pivoted higher and lower (or lower and higher), but they ended near the place they closed on Friday. PS Although the Chicago Fed National activity index moved to 0.27 from 0.05 last month, it had little impact at the time. The rest of the day was void of any data or events to push the dollar around.
For the CAD, oil was under pressure for most of the day. Later there was a technical breach that helped to weaken the currency. The WTI crude oil futures ended the day down about 3%. Today was the last day for trading the September contract. The October contract (which will be the front contract tomorrow) was also under pressure - falling about 3.5% to the $47.40 area. Weaker oil helps to weaken the CAD as they are an exporter of oil and their economy is dependent on the oil industry. Technically, the pair also benefited from a rise above the 100 day MA. In the London morning session, the price stalled near the 100 day MA at the 1.2929 area. Around the London 4 PM fixing, the price pushed ahead of the 100 day MA that helped support the next leg higher in the pair (the price never moved back below).
For the GBP, the "story' was a little more sketchy. The more fundamental slant came from the idea that the PM May was working toward completing Brexit plans. That should have been more bearish for the GBPUSD (and the GBP overall). However, the price could not go down, and take out the lows from yesterday, so it started to move back higher. In the NY session, the GBPUSD toyed with the 100 and 200 bar MAs on the 4-hour chart at the 1.30896 and 1.3115 levels respectively. When the pair based against the 100 bar MA and rose above right before the London 4 PM fixing, it looked as if there may have been some orders and/or some shorts were squeezed. On Friday, record shorts in the GBP were reported in the weekly CFTC commitments of traders speculative position report. If the momentum gets gong the other way (i.e. if the GBP starts to rise), shorts can find themselves on the wrong side of the price action. That may have been a contributing side note for the action today.
Although the other major currencies ended up little changed against the greenback, there was movement in the NY session.
The EURUSD did start the session down on the day, but saw a break above the 100 hour MA at the 1.3000 area, as a bullish clue. The break sent the price to session highs at the 1.1330 level (near Friday NA high levels) and higher on the day. Momentum slowed and the price rotated back toward the Friday closing levels.
The USDJPY has a quiet NA session. The pair initially found technical support near the 100 hour MA and trend line support between 100.25-30. The price rotated to the mid 100.40's only to fall back down on the moves higher in the GBP and EUR. A report that Abe was planning a construction bond sale may have also contributed to USDJPY weakness. The market is more interested in stimulus for industry and technology to spur on economic growth.
The AUDUSD and the NZDUSD moved sideways for most of the US session in a narrow trading range.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.