Forex news for NY trading on July 13, 2018

A snapshot of other markets at the week's end:

  • Spot gold is down $6.04 or -0.48% at $1241.40. The price is down from last Friday's close at $1255.48
  • WTI crude oil futures closed the week at $71.01. Last week the contract settled around $73.80
  • Bitcoin on the Coinbase exchange is trading at $6176 up $1.95 on the day. Last Friday, the price closed at $6570.76.

The US stock indices closed higher, with the Nasdaq eking out the 2nd consecutive record close day:

  • Dow rose 0.38% at 25019.41
  • S&P closed above 2800 at 2801.31.The price was up 3.02 points or 0.11%. The all time high was back on January 26th at 2872.87
  • Nasdaq closed up 2.06 points or 0.03% at 7825.97. The high today at 7843.52 is the new record high trading price

For the year, the major indices are now all in the black again:

  • Dow is up 1.21%
  • S&P is up 4.78%
  • Nasdaq leads the way with a gain of 13.36%

The Europe stocks were also higher today with the:

  • German DAX 0.38%
  • France's CAC +0.43%
  • UK's FTSE +0.14%
  • Spain's Ibex -0.33%
  • Italy's FTSE MIB +0.47%

For the year, France's Cac and the Italian FTSE MIB (barely) are the only gainers:

  • German Dax -2.92%
  • France's CAC +2.2%
  • UK's FTSE -0.34%
  • Spain's Ibex -3.08%
  • Italy's FTSE MIB +0.18%

In the US debt market today:

For the week:

  • 2 year rose from 2.536% to 2.578%, up 4.2 bps.
  • 5 year rose from 2.718% to 2.723%. up 0.5 bps.
  • 10 year rose from 2.822% to 2.835%. up 1.3 bps
  • 30 year was unchanged at 2.929%

The NY session started with a BOE Cunliffe saying softer Q1 activity was driven by poor weather. That helped to get the GBPUSD off its back. Monday was the high in the pair at 1.33615. The low today reached 1.3102. At the low, the pair stalled at a lower channel trend line on the hourly chart (see chart below). The rise off that low has taking the price all the way to the 200 hour MA and 50% retracement of the entire weeks trading ranges (at 1.3232). Back to a neutral area. Next week, that level will be a pivot for the bulls/bears. PS Also helping the GBP today was Pres Trump saying that a trade deal could/would be done after Brexit. PM May, also was more assertive about Brexit, which seemed to appease the market a bit.

The EURUSD initially got dragged higher with the GBPUSDs move. Later when the pair was able to move from negative to positive at 1.16683, there was more buying into the close. For the week, like the GBP, the price high was on Monday at 1.1790. The low was today at 1.16119. At the close, the price was able to extend above the 38.2% at 1.1680 (closing at 1.1683). Next week, the 100 and 200 hour MA are converged at 1.1698. ON Wednesday, the 200 hour MA was broken to the downside. On Thursday, the MA was tested and held. If tested next week, will the sellers keep a lid on the pair?

The USDJPY trended higher this week. The low on Monday reached 110.344. The high was reached today at 112.796. Today, the intraday bias started to weaken technically on the break of the 100 bar MA at 112.63 (see post here) and by the end of the day, the price had reached to 112.27. Overall, the fall is still modest given the move higher but corrective sellers did make a few pips.

The Bank of Canada had a more hawkish hike this week - at least that is what was thought at first. The price moved to a new week low after the event (at 1.30597). The problem is the momentum could not be sustained (it only made a new low by 5 pips) and the squeeze was on. The high was reached on Thursday at 1.32178 and moved down to 1.3150 on the same day. ON Friday, the price moved higher and then back lower and at the close, settled in between the 100 hour MA at 1.3155 and the 200 hour MA at 1.31406. Next week, that area will be a barometer for the bulls and the bears.

Below is a snapshot of the winners and losers in the forex market today. The GBP ended as the strongest in the down and up session. The NZD was the weakest. The USD ended mostly lower with only a gain vs the NZD (and a tiny gain vs the CAD).

Wishing you all a happy and safe weekend. Thank you for your support.

Greg (and the rest of the FXL staff).