Forex news for North American trading on May 24, 2017
- NAFTA negotiations - Mexico said to have made an offer to the US to reach agreement
- BOE Carney: Q1 economic growth was probably temporary
- Gold up on geopolitical concerns but holds below 200 day MA
- Is the correction over in the USDJPY? This chart might give you some confidence.
- Feds Harker sees 3 hikes this year if inflation does not accelerate
- US sells $30B of 7 year notes at 2.930% vs. 2.935% WI
- Canada PM Trudeau: Cannot see link on auto tariffs, national security
- Trump says maximum pressure campaign on North Korea will continue
- German Dax is the worst performer in a down day in Europe
- Fed's Bostic: North Korea summit cancellation adds more uncertainty
- KC Fed manufacturing +29 vs +26 prior
- US April existing home sales 5.46m vs 5.55m expected
- Trump calls off summit with Kim Jong-Un planned for Singapore
- USD/CAD higher with Trump considering 25% tariff on imported cars to pressure NAFTA talks
- US March FHFA house price index +0.1% m/m vs +0.6% expected
- US weekly initial jobless claims 234K vs 220K expected
In other markets:
- Gold up $11.57 or 0.89% at $1305. Gold stayed below the 200 day MA on the rally.
- WTI crude moves lower by -$1.14 to $70.70
- US 2-year yield, 2.508%, down 2 bps. 5 year 2.810%, down -1.4 bps. 10 year 2.975%, down -1.8 bps. 30 year 3.125%, down -2.5 bps
- S&P 500 fell --0.20%, Nasdaq fell -0.02%. Dow was down -0.30%
- JPY is the strongest on the flight into the "relatively safety of the JPY". The CAD is the weakest as concerned about NAFTA pressured the loonie.
In the US, initial jobless claims were higher than expectations, the FHFA house price index was lower than expectations, the existing home sales were also a bit weaker versus the consensus. All helped to weaken the dollar a bit
However the story of the day was the cancellation of the summit between US Pres. Trump and N. Koreans Kim Jung Un. I cannot say that the cancellation is a total surprise. The reception from Kim became more "chilled" over the last few weeks. This week Trump said there was a "substantial chance" the meeting does not take place.
Last night Choe Son Hui, the North's vice minister of foreign affairs, said if the meeting was called off, the U.S. could instead face off with North Korea in a "nuclear-to-nuclear showdown." She also called VP Pence a "political dummy". Her reaction to Pence was in response to the VP paralleling the N. Korea situation to that of Libya and Moammar Gadhafi if the N. Koreans did not have a full denuclearization.
Such rhetoric is typically not healthy going into peace talks. So the meeting was called off.
The news helped to push the USDJPY to new session lows at 108.95 - down from the close of 110.05. However, the pair did bottom against the 200 bar MA on the 4-hour chart at the lows. That technical hold helped the pair recover into the close.
For the EURUSD, it rallied higher (lower dollar) but it too ran into resistance against a technical level. For it, it stalled against the 100 hour MA at 1.1752 (the high reached 1.1750). The price came off into the close and trades at 1.1722. Remember the 1.1712-17 was a key support area for the pair (lows from Nov/Dec 2017 and the 38.2% of the move up from the Dec 2016 low. That area at 1.1712-17 will be key support in the new day. The 100 hour MA at 1.1750 will be resistance.
The GBPUSD was a third pair that rallied on the news, but it too ran into technical levels that stalled the dollars fall. Like the EURUSD, the GBPUSD stalled at the 100 hour MA. For it, the level was tested no fewer than 3 times. That MA came in at 1.3414 at the time of the news, and the high reached 1.34134.
Below is a snapshot of the winners and losers for the day.
