Forex news for trading on February 22, 2018

In other markets, a snapshot near the close is showing:

  • Spot gold up $6.98 or 0.53% at $1331.51. The precious metal got a boost from the lower dollar
  • WTI crude oil futures is trading up $1.04 or 1.69% at $62.72. A surprise draw in inventories helped to send the price to the upside
  • Bitcoin is trading down $-362 and is trading back below the $10,000 level at $9920. The low price extended to $9715 on the day.

In the US stock market today, the major indices ended mixed but well off high levels.

  • The S&P closed higher by 0.10%
  • The NASDAQ index closed lower by -0.11%
  • The Dow industrial average closed higher by 0.66%.

In the US debt market today, the US treasury auctioned off 29 billion of seven-year notes. The demand was so-so. Yields in the USD are lower.

  • 2 year 2.25%, -1.6 basis points
  • 5 year 2.655%, -3.0 basis points
  • 10 year 2.917%, -3.3 basis points
  • 30 year 3.203%, -1.7 basis points

European stocks today closed mixed.

Economic data released in the US today was not bad.

The initial US jobless claims came in at 222K versus 230K expected. The 4- week moving average continued its fall lower and stands at 226K.

Later in the US morning session, the leading index came in better-than-expected 1.0% versus 0.7% estimate. Going back to January 2017, there have only been 2 months where the index was less than 0.3%. The last 4 months have come in at 1.0%, 0.6%, 0.4% and 1.4%. I guess things continue look good for the US economy.

The better data did little to help the US dollar. The sum of the % declines of the major currencies was -0.62 at the start of the NA session. Near the end of the day, the sum of the % changed totaled -2.91 (see table below). The greenback lost value in the US session despite what was better data.

Technicals played a role in the greenbacks decline.

The USDJPY was the big decliner for the day. The dollar fell -0.96% against the JPY. Technically, the pair fell below its 200 hour MA after moving above the MA level yesterday and holding support against it for most of the day yesterday and into the London morning session. The 200 hour MA is now risk for shorts. Stay below is more bearish. It comes in at 107.076 currently.

The EURUSD moved above a downward sloping channel trend line at 1.23119. The break sent the price up toward the 100 hour MA (currently at 1.2349). As we head into the new day, the price remains above the broken trend line at 1.2300 level but below the 100 hour MA at 1.2349 (the current price is at 1.2328). The dip buyers are looking for more corrective upside (we are up on the day), but unless the 100 hour MA is broken, the bears can still lay claim to the move down from the Feb 16 high.

For the GBPUSD, the pair moved lower initially into the London session, but found support at a lower trend line at 1.3856. That gave the buyers the go ahead to take the price higher. The run took the price up past the 200 and 100 hour MAs (currently at 1.3968-70) and to a high of 1.3988, but the stops triggered above the MA were short-lived and the pair is ending the session below the two MA at 1.3956. If going higher, a break of the MAs at 1.3968-70 will be needed.

The USDCAD got a shove higher on the back of much weaker retail sales (see report here). That pushed the price of the USDCAD above the 200 day MA at 1.2714 (it is at 1.27055 in the new day) and to a high of 1.27518. However, the US dollars overall weakness weighed on that pair today, and the selling took the price back lower. The pair is closing below the MA at 1.2702.

The USDCHF was higher in the Asian Pacific trading but stalled right at the swing high from Feb 9th on the hourly chart at 0.9408. Stopped on the level. The fall from that peak, took the pair back down to the 100 and 200 hour MAs at 0.9318 to 0.9336 and the price selling stalled. In the new day, traders will look for a break either above the 100 hour MA at 0.9336 or below the 200 hour MA at 0.9318.

Dollar weakness in the face of better data. The technicals helped lead the way.