Technical Analysis

Forexlive Americas FX news wrap: USD has another whippy day

The USD had another whippy day with the greenback moving lower, then up and then back down again. Overall, the dollar is ending higher vs the GBP, and CHF, lower vs the JPY, NZD, AUD and EUR and unchanged vs the CAD (ahead of the BOC rate decision tomorrow).

Economically, the S&P/manufacturing PMI came in touch better-than-expected 46.8 versus 46.0 expected. The Richmond Fed manufacturing index was weaker at -11 versus -4 expected mirroring more the Empire manufacturing than the Philly manufacturing index. The Philadelphia nonmanufacturing Index came in at -6.5 versus -12.8 expected, so it was similar to its manufacturing index which was also better-than-expected.

Technically, some key levels in play for major indices versus the US dollar shows

  • EURUSD fell in the US session to test the 200 hour MA, and found support buyers. Recall on Friday, the dip on that day also stalled against the same MA and bounced. The price of the EURUSD is closing above a swing area between 1.0866 and 1.08743. The price is currently trading at 1.0886. Stay above the swing area and the buyers are in more control. The high from yesterday extended up to 1.09261. There is a swing level from March and April near 1.0940
  • USDJPY moved lower in the Asian session, based in the European morning session and rose in the early New York session to a topside trendline (see green and red circles), before reversing back down to a lower upward sloping trendline (see red circles). Traders will be looking for a break outside of the trendlines for bias defining clues with the downside being the closest hurdle. Also, the 100 hour moving average of 129.484 will be eyed on the downside

USDJPY between trend lines

  • GBPUSD: The 1.2300 level in the GBPUSD is the home to the 50% midpoint of the range from the June 2021 high. That same level was also near the 200 hour MA on the hourly chart. Today, when the price fell back below those levels, the momentum took the price to a low of 1.2262. However, when the price rebounded on the dollar selling, the 1.2300 level was rebroken to the upside and sellers turned to buyers again. The price of the GBPUSD is still lower on the day, but off the lows and above the midpoint on the daily and the 200 hour MA on the hourly at 1.2300. The price is trading at 1.2339.

In other markets:

  • Spot gold is trading up $6.64 or 0.34% at $1936.70
  • Spot silver is trading up $0.20 or 0.81% at $23.64
  • WTI crude oil is trading down -$1.50 at $80.12
  • Bitcoin is trading just above $23000 at $23014. On January 1, the price traded at $16500.

The US stock market was mixed, breaking a 2-day win streak in the Nasdaq and the S&P. The Dow rose for the 3rd day in a row:

  • Dow rose 104.40 points or 0.31%
  • S&P fell -2.88 points or -0.07%
  • Nasdaq fell -30.13 points or -0.27%

After the close Microsoft reported mixed results but the stock is trading up $9.76 or 4.03% at $251.60 in after hours trading. Texas Instruments also reported. It’s stock is up $0.21 or 0.12% at $177.25.

Tomorrow, Tesla, AT&T, IBM, Lam Research and ServiceNow report earnings. On Thursday, Intel and S&P will be released.

In the US debt market today, the yields are lower with the longer end moving down the most. The US treasury did auction off $42B of 2 year notes with solid demand from international investors.

  • 2 year yield 4.210%, -3.0 basis points
  • 5 year yield 3.574% -5.0 basis points
  • 10 year 3.454% -6.8 basis points
  • 30 year 3.604% -8.6 basis points

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