Not much of a rebound in the NY trading session. Below the 100 week MA.
As the day comes to a close and the Asian traders look to start their day, the NZDUSD has maintained its weakness on the back of the coalition formed.
It tried the upside but stalled after data
The EURUSD moved above a "bullish above/bearish below" area defined by a number of swing lows and highs going back to early August. That area (yellow area in the chart below) comes in at 1.1822-37. The high before the 8:30 US data reached 1.1842. The better data helped to push the pair back into the neutral area defined by the yellow area.
Broke higher from the MA yesterday. Retesting today
The USDJPY is down retesting the 100 and 200 hour MAsat 112.26-33. The pair broke higher from these MAs yesterday and raced to a high of 113.14 today. We are all the way back down retesting the area now. Stocks getting hit and rates are lower. They are contributing to the weakness.
USD up against the NZD and GBP, but down against the rest.
The NZD is running away with the activity today. The new coalition government has sent the NZD tumbling to the downside. Against the majors, the NZD is down from -1.7% to -2.29%. Those are some big % moves to the downside for the kiwi.
Breaking trend line keeps the buyers happy and in control
The EURJPY has also had a nice trend move higher today.
Looking at the 5 minute chart, the pair started the day basing near the 100 and 200 hour MAs. The pair moved up to test the 100 hour MA at 132.32 area. Then the 200 hour MA and 100 bar MA on 4-hour chart at 132.48-50 area. Once above that area, the pair started to run higher (see 5 minute chart above).
Scoots up to the 50% retracement
The EURUSD has pushed to and through the 200 and 100 hour MAs at 1.1793-955 area. The break sent the pair to the next level defined by the 50% of the move down from the October 12 low at 1.18043.
Only a few pips here or there so far.
Wage pressures modest
Employment growth modest
Labor market tight.
Those are some of the major headlines. The report did harp on tighter labor and hinted of some wage pressure (i.e. growing use of sign on bonuses to attract workers and shortages restraining growth, and scarcity of workers in building, transport, and skilled manufacturing)
Ceiling above. MA below
The EURGBP stalled ahead of the 200 hour MA yesterday and again earlier today. Then it broke higher.
The move higher moved up to a ceiling. That ceiling alternated between a ceiling and floor back on October 9th, 10th, 11th and 12th (see red numbered circles). The retest today (at the now ceiling), stalled the rally.
Making new highs as I type but runs into the next overhead MA resistance
The EURUSD is just breaking to new session highs. Stops have been triggered and the price has moved right up to the 200 and 100 hour MAs at 1.1792-96.
Have not closed above 200 day MA since May 15th
The USDCHF has moved above the 200 day MA today after testing the level yesterday and backing off.
Looking at the daily chart above, the low today based at the 38.2% of the move down from the December 2016 high at 0.97729. That level was also home to a number of swing levels as well in June, July and September. That was a key support level and that level held support. Bullish.
Midpoint of the October range in the area.
The EURUSD stalled for the 2nd time at the 100 bar MA on the 4-hour chart at 1.1776. The 50% of the October trading range at 1.17739 is also in the area. The high just peaked at 1.17769. The price is trading back down to 1.1765. Buyers shifting to sellers? It is a possibility.
S&P and Nasdaq marginally higher
The US stocks are higher in early trading with the Dow/IBM leading the way. Big Blue is trading up 7.5% on earnings and more positive chatter about revenue declines stopping.
The level comes in at 112.93. The high today reached 112.92
The USDJPY has been trending to the upside today.
Looking at the 4-hour chart, the pair moved above the 100 bar MA on the 4-hour chart at 112.47 and that has helped propel the pair up to other swing levels from the recent past (we trade in a range). The 112.82 level was the high from last week. Traders are trying to hold that level now.
Weaker housing. Fed comments
Dudley and Kaplan are speaking on a panel and housing starts were weaker. I can't say the comments are a big surprise but the EURUSD has rallied back higher and has traded back in the black on the day (closed at 1.1763) in a down and up day.
The dollar is getting a boost from rates, and gold and perhaps comments and stocks continue to add wealth (even IBM is talking about a turnaround)
The USD is leading the currency league table today. It is the strongest currency of the major pairs rising the most vs. the NZD and the JPY. Those two currency pairs are the weakest today. said that it is vital to stick to current monetary policy.
Survives the NAFTA headlines.
The loonie was pressured earlier in the day. Reports from the NAFTA discussions were that both Canada and Mexico could not come to terms with the US in the latest round of trade talks. The USDCAD moved higher. A stronger bias toward the USD also helped the pair move higher.
Nothing worse than digging yourself in a hole. The good news is you can avoid doing it.
I recently did some hiking with some friends in the Grand Canyon. The experience reminded me of the parallel between life and trading. More specifically, how we can dig ourselves in some pretty deep holes. The good news is we can avoid digging those holes that get us into so much trouble. Find out about it in this video. If you like it please hit thumbs up. Also be sure to subscribe to our YouTube page.