Forex news for trading on May 8th, 2017.

  • Nasdaq closes at a record level but gains are small today
  • G7 to talk about prescriptions for growth this week
  • David Einhorn: Oil prices aren't going to come back
  • What's on the US economic calendar this week
  • Davide Serra says to short UK bonds
  • Forex technical analysis: AUDUSD trades near lows. Retail sales in the new day.
  • CIBC sees EUR/CHF to climb in the months ahead
  • NY Fed senior loan officer survey shows tighter commercial lending
  • Stanley Druckenmiller: I sold all my gold on election night (then bought some back later)
  • This doesn't bode well for trading
  • VIX falls to the lowest since 2007
  • France cheers Macron's win with a 1% loss in the CAC
  • New York Fed: Inflation expectations rise in survey
  • Barclays trade of the week: Sell AUD/NZD
  • Fed's Bullard: Fed communication on balance sheet will be 'brilliant'
  • Fed's Mester: Personal incomes rising, labor market and confidence good
  • US employment trends and labour market conditions beat in April
  • Fed's Bullard: Taper tantrum was caused by communication problems
  • Mester: Fed has stepped up discussion of US dollar on economy
  • Fed's Mester in Q&A: We're not quite there yet on price stability
  • OPEC sources looking at 9 month extension or more
  • Mester: Fed must be "very vigilant" against falling behind
  • Fed's Bullard says US economy looks like it's a low-growth state
  • The strongest and weakest currencies as NA traders enter for the day

In other markets today:

  • Crude oil traded higher at $46.47 in after hours trading (up $0.24) on OPEC chatter of oil cut extensions out to 9 months. Nevertheless it is still off the high of $46.98.
  • Spot gold is trading at $1226.40 up $4.80 or 0.39%
  • The US stocks were barely higher from Friday but off lows in quiet trading.
  • US bond yields were up with the 2 year up to 1.328% or 1.8 bp, 5 year up 1.909%, up 2.8 bp, 10 year up 2.3850%, up 3.6 bp, 30 year back above 3.0% to 3.019% up 3.6 bp

The USD moved higher in NY trading and ended the day as the strongest currency of the day. The greenback rose against all the major currency pairs but it was a slow push to highs in the NY session.

The France election was of course the event of the weekend, but there were no surprises, the EURUSD gapped higher on the opening but started to give back some of the gains in the Asian session. That continued in the NY session on the break of the 100 hour MA and move to the 200 hour MA at 1.0920. Now, most of the action occurred before NY traders came in. The NY session only saw an 18 pip additional move lower. Nevertheless, the French election seems to have been a buy the rumor/sell the fact event with traders and analysts asking of France now...."OK Macron is in and fears of LePen have fades away but now what?" The vote by the market was not so bullish about the political prospects - at least on the first day.

In the US today, the Labor market conditions index - a composite of 19 labor market indices - was better than expectations at 3.5 vs 1.0 estimate but lower than the prior month as it was revised sharply higher to 3.6 from 0.4. You might think that the index would be a bit more stable/predictable given the inputs from the employment pieces but given the large revision, apparently not. Anyway, employment is better. We saw that on Friday with the 211K increase in Non Farm paying jobs. Did it contribute to the dollars gains today? I am not so sure, but the employment situation in the US does not hurt the dollar.

There was some Fed speak today with Mester promoting a hawkish stance. Bullard, on the other hand, was his usual dovish self (keep things where they are until it is clear the economy has shifted gears).

What about the movements in some of the major pairs.

Apart from the EURUSD which I spoke to above, the USDJPY was steady to the upside today. The price moved above a topside trend line on the hourly chart at the 112.91 area and continued above the high from last week at 113.04 and even the 100 day MA at 113.142. That 100 day MA is lower in the new trading day at 113.104 and will be close support for traders in the new day.

The GBPUSD is another pair that wandered lower (dollar higher), in the NY session. However, it has found support near the 38.2% of the move up from the May 4th low at 1.2927 and the 100 hour MA at 1.2926. On the topside in the NY session, there was a lid first at 1.2964 and then 1.2948 (see post here). That combination - along with the ceiling ceiling at 1.2985-88, just short of the natural 1.3000 level - gave traders the notion that perhaps the high was in place. We will know more in the new day if the price can get below the 100 hour MA at 1.2926 and the 200 hour MA at 1.29136.

IN Australia, retail sales will be released with MoM expectations for a 0.3% increase. Technically, the pair is trading near the lows from last week (lowest level since Jan 11, 2017) at 0.7367. The low today could only get to 0.7377. Still down on the day , but above the low below. On the topside, should the number surprise to the upside, the 0.7425 is where the 100 hour MA is found and also near the highs from both Friday and today.

-----------------------------------------------------------------------------------------------

Below is a snapshot of the major currencies % changes vs each other. The USD is the strongest. The CHF is the weakest.