Forex news for US trading on August 2, 2016.

  • US stocks end the day marginally higher but at the highs
  • Feds Kashkari: Still room in job market to put people back to work
  • US crude oil futures settle at $40.83 per barrel
  • Bitcoin hacked! Millions stolen after exchange attacked.
  • Janus Capital''s Bill Gross: I don't like bonds/stocks. I like gold.
  • ECB Weidman: Too early to tell Brexit impact on price development
  • Quiet trading. Awaiting next key events.
  • Fed Evans: Worthwhile to wait for 2% inflation
  • European stocks take a day off
  • Bank of England preview: I’ve never been so conflicted over a BOE decision
  • Gold correcting on the day but key support below
  • Forex technical analysis: EURGBP respecting the 200 hour MA
  • US EIA weekly oil inventories 1413k vs -1750k exp
  • USDJPY spiking higher...
  • July 2016 US ISM non manufacturing PMI 55.5 vs 56.0 exp
  • EURUSD slides below intraday floor and sellers go with it
  • July 2016 US services PMI final 51.4 vs 51.0 exp
  • US stocks have an unsettled start at the open
  • Forex technical analysis: AUDUSD trades at new day lows
  • Forex technical analysis: USDCAD tests yesterday's corrective low and bounces
  • Reuters poll: EURUSD to weaken to 1.08 in 3 months and 6 months
  • Forex technical analysis: EURUSD tests lows after ADP
  • July 2016 US ADP employment 179k vs 170k exp
  • The strongest and weakest currencies as NA traders enter from the day
  • Time to get a sniff off the Friday's jobs report via the ADP data
  • US MBA mortgage applications -3.5% vs -11.2% prior

Economically today, the ADP employment report showed a gain of 179K for the current month. This was higher than the 170K expected and in line with the estimates for Non Farm Payroll which will be released on Friday. Fed's Evans spoke about holding off policy until inflation reached 2%. He talked about one raise in 2016 but also said he did not expect inflation to reach 2% until 2018. So I guess he is keeping all doors open and awaiting the data.

The big events are to come with the BOE decision tomorrow and the US employment report on Friday. Both have the potential to move the markets but with the trading on summer mode, traders have to be aware of anything. For a great preview of the BOE, read Ryan's post HERE.

The USD was higher in trading today. It rose against all the major currency pairs with the exception of the CAD (the Cad was the strongest today). USDCAD fell as oil price rebounded near 4% on the day. Weekly crude oil inventories were higher but Gasoline and Cushing inventories showed a drawdown. Oil prices initial fell on the headlines but reversed when they reviewed the details, and that helped to drive the CAD higher.

The EURUSD wandered lower in the Asian Pacific and London morning trading. Support against the 100 hour MA was tested in the NY session and later broken (at 1.11644). Sellers entered on the break and the selling pushed the price down another 24 or so pips to 1.1140. In the new trading session, stay below the 100 hour MA and the bears remain in control.

The GBPUSD is ending the day down from yesterday, but near the middle of the range for the day. The pair seemed to be positioning itself ahead of the key interest rate decision tomorrow at 7:00 AM ET/1100 GMT. The 200 bar MA on the 4-hour chart is at 1.3403. The 100 bar MA on the 4-hour chart is at 1.3207 and the price is trading around 1.3320 - sort of in the middle of those two extremes. Barring some liquidity induced spike or tumble, I would expect the pair to waffle between those extremes until the ball is put in play at decision time. Depending on what is said, done, not done, should drive the next trend move in this pair.

The USDJPY was another pair that reversed some of the move from yesterday, but had an up and down time of it. In the US morning session, there was a spike higher - seemingly induced by stops above the high for the day - that took the price about 22 pips higher. However, that rally soon fizzled (if you can call it that) and the market limped lower into the close. Even with the sideways action today, the price at 101.22 is about 100 pips away from the lagging 100 hour MA at the 102.26 level (and moving lower). The get the feeling that the market may continue to wait for the 100 bar MA to get closer before it decides on either 1. going above and calling this weeks low at 100.67 a low, or 2. using the moving average to lean against and then continue the bearish move toward the parity level.

The AUDUSD wandered lower but found support against the 100 hour MA. The NZDUSD moved lower and broke below the 100 hour MA. The NZD was the weakest currency of the day as it fell against all the major currency pairs. The market may be looking ahead to the RBNZ decision next week where they are expected to cut rates by 25 basis points to 2.0%. Of course the RBA cut rates this week only to have the AUDUSD rocket higher instead of lower. In the new trading day, Australia will release Retail sales for June (9;30 PM ET/0130 GMT) with the expectations for a 0.3% increase (was 0.2% in May).

Below is a snapshot of the % changes of the major currency pairs vs each other.