Forex news for NY trading on July 12, 2019.
In other markets:
- Spot gold is trading up $11.36 or 0.80% at $1414.96. The yelllow metal was helped by a lower USD.
Technically, the price at the session lows, stalled near the 100 hour MA support level, giving the buyers more
confidence (and forcing the sellers to buy). See technical post
- WTI crude oil future are trading at $60.26, up $.06 or 0.10%. The high today
reached $60.74. The low extended to $59.93. For the week, the price was up over 4.5% helped by a much larger than expected drawdown of inventories on Wednesday. For a technical look at the pair CLICK
- The price of Bitcoin is trading up $447 at
$11600 despite negative comments on cryptocurrencies from Pres. Trump.
However, when Fed’s Evan’s (a new voice this week) started chirping in Chicago, the dollar started to take on an even weaker tone. Comments included:
- Business investment weaker than expected
- Sees growth for 2019 around 2% which is close to what he regards as sustainable trend
- Business investment has been weaker despite fiscal aid
- Nervous about under running inflation objective
- Policy is currently about neutral but could be more accommodated if the aim was to lift inflation
- A couple of rate cuts could lift inflation by 2021
- Framework is adequate as long as policymakers are going to actively push for inflation of 2% to assure target is met symmetrically
- Hard for businesses to make long-term plans given uncertainty around trade landscape
- Slowing foreign growth is going to dampen the US economy
- Rsk management approach means being a little more accommodative in case downside risks materialize, but we don’t want to go too far
- Now am more concerned policy isn’t on accommodative side
- Takes seriously the current rates may be more restrictive than should be
- Could argue for rate cuts on inflation, global slowdown
He seemed to get more and more dovish as he went along.
Overall, the votes are there for a rate cut in July and if Charlie Evans, Vice Chair Williams, Chair Powell, Thomas Barkin, et. al. take the chatter from this week into the meeting at the end of the month, the bias may shift even more to the dovish side for other meetings this year.
Below is a snapshot the rankings of the strongest and weakest currencies. The AUD is ending as the strongest on risk on sentiment, the USD is the weakest.
In the US debt market, yields are ending the session lower, but off the day’s lowest levels.
key for the technical bias. For the week, the low for the week was reached on Tuesday at 1.11927. The high was on Thursday at 1.1285. The 38.2% of the move down from the June 18 high comes in at 1.1276. A move above that level would be more bullish in the new week.
USDJPY: The USDJPY fell below a neckline level at 107.93, and the 100 bar MA on 4-hour (at 107.956) and 50% retracement of the move up from June 18 on Friday (at 107.878). That area will be close resistance in the new trading week. Next week on more selling, the 107.53-57 will be a key swing area from June 18 and July 3rd to get below. If the 108.00 is breached above, the 200 hour MA and 200 bar MA on the 4-hour chart will be a key upside target.
AUDUSD: The AUD is the strongest of the major currencies today. In the process, the pair based against the 200 hour MA at 0.6984 , moved above a swing area at 0.7012-16 and breached the 100 day MA at 0.70209. The pair did stall near that 100 day MA, leaving the “higher?” or “lower?” decision for next week’s trading. On more upside, the 0.7047 is the July high and the highest level since May 1.
USDCAD: The USDCAD was pushed lower on more bearish USD flows, and higher oil in the second half of the week. The pair is closing at the lowest level of the year, and lowest level since October 2018 (trading at 1.3032). A move below the 1.3000 level opens the pair for a shot at the 100 week MA at 1.2980.
My fingers are tired and I must have lost finger weight from all the typing exercise without Adam this week (and all the Fed speak and other events). I will return part of the favor on Monday and Tuesday (family in town), but look forward to my return on Wednesday. Thank you for all your support this week and wishing you all a great and safe weekend.