Technical Analysis

Forexlive Americas FX news wrap: The forex market has a quiet day as traders await CPI

The CPI is two sleeps away for traders until it’s release on Thursday morning at 8:30 AM ET, but the forex market was not in the mood to move far today.

The EURUSD only had a 37 pip trading range coming into the trading day and extended that to 47 pips in the US session but that was still well short of the average seen over the last month of trading ( 92 pips).

Looking at the ranges today and comparing them to the 22 day averages (about a month of trading) showed that apart from the EURGBP which had a range that was 85% of what is normal, and the EURCHF which was 72%, the other major pairs were 66% or less. The AUDJPY was only 40% of what is normal. The GBPJPY was 42% of the norm.

In other words, price action was limited. The markets were asleep – especially in the US session….

I would attribute the lack of price action to the markets reluctance to move much before the key US CPI data on Thursday. The data will be key for either the continuation of the dollar lower bias seen over the last few months, or lead to huge disappointment and a higher dollar (lower stocks and higher yields).

Markets, like the Fed, are still data dependent. Unlike the Fed, the markets are starting to discount the end of rate hikes sooner rather than later. Yields are off high levels, the USD is lower. Stock are playing things slower but the Nasdaq is now higher for the 3rd day in a row.

However, all can unravel with a higher than expected inflation number on Thursday.

Today, the strongest currency was the EUR. The weakest was the CAD as it corrected some of the gains seen after their stronger than expected jobs report on Friday.

The strongest to the weakest of the major currencies

In other markets today:

  • Spot gold is up $5.50 or .30% at $1877
  • SPot silver is down -%0.6 or -0.27% at $23.56
  • Crude oil is near unchanged at $74.63
  • Bitcoin is up modestly at $17451.

In the US debt market, yields moved higher today despite a pretty good 3 year note auction. The Treasury auctions 10 and 30 year bonds tomorrow and on Thursday and the market may be backing up rates in anticipation of that supply.

In the US equity market, the major indices moved higher with Nasdaq and the Russell 2000 leading the way despite the push higher in yields.

  • Dow up 0.56%
  • S&P up 0.70%
  • Nasdaq up 1.01%
  • Russell 2000 up 1.49%

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button