Archiv für den Monat: Juni 2023

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Forexlive Americas FX news wrap 9 Jun: USD falls this week as market awaits the FOMC 0 (0)

This week, the US dollar, tracked within a 103.290-104.400 range in the DXY index. That index (heavily weighted to the EUR) for the week fell -0.49%. The decline was initially triggered this week by below-expectation US services ISM data. In that report, released on Monday, the index for May 2023 came in below expectations with a reading of 50.3 against the predicted 52.2. The figures mark a decline from the prior 51.9. Seeing the nonmanufacturing Index fall implies a potential weakening outside the goods sector.

Within the report:

  • The employment index dropped to 49.2 from the previous month’s 50.8.
  • The new orders index fell to 52.9, falling short of the expected 56.1.
  • The prices paid index slid to 56.2, its lowest since May 2020, from the earlier 59.6.
  • New export orders, imports, and the backlog of orders all saw declines compared to last month’s numbers, coming in at 59.0, 50.0, and 40.9, respectively.

The greenbacks fall deepened when the Reserve Bank of Australia (RBA) on Tuesday unexpectedly raised the cash rate to 4.10% and signaled further tightening to control inflation. The Australian dollar subsequently rebounded from a week low of 0.6578 on Monday to a Friday high of 0.6750. The price is closing the week near the pair’s key 100-day MA at 0.6740. Next week, moving above and away from that MA will be needed to increase the bullish bias. If there is a corrective move lower the 200-day MA at 0.66905 will be eyed for bullish clues. Stay above on a correction, will be indicative of bullish undertones remaining.

On Wednesday, the Bank of Canada (BoC) also increased its interest rate by 25 basis points due to insufficiently restrictive monetary policy and ended the pause that had been in place for 2 consecutive meetings. The USD/CAD moved to a low on Wednesday of 1.3320 (higher CAD). The market price for the USDCAD traded higher and lower on Thursday and again on Friday. The weaker-than-expected Canadian jobs data today took the USDCAD price up to a high of 1.33688 from a pre-employment low of 1.33157, but when the price couldn’t extend up to the falling 100-hour moving average (it currently is at 1.33813), the USD sellers reentered pushing the price back down to test the May low near 1.33132. Buyers leaned against the low level and the price bounced marginally higher into the close to 1.3340. Next week if the price of the USDCAD can’t get above the 100-hour moving average, the sellers will remain in control and a breach of the May low can be anticipated.

Despite the two central bank hikes this week, the market continues to anticipate no change in FOMC rates when they meet on Wednesday. That bias was reinforced on Thursday this week when the initial jobless claims surged to the highest level since October 2021. Jobless claims rose to 261K well above the 235K estimate.

Before the rate decision on Wednesday, the Federal Reserve will get the final key piece of economic data with the US CPI scheduled for release at 8:30 AM on Tuesday. The expectations are for a 0.2% gain MoM and the year-on-year measure to come down to 4.1% from 4.9%. The MoM gains from last year have been shedding the YoY inflationary numbers as they roll off. The YoY numbers have seen a fall from a high of 9.1% in June 2022 and have one more big MoM number to roll off when 1.3% drops out when the June CPI is announced in July. That should bring the YoY rate to the low 3% range, but still well above the Fed target of 2%. Going forward, it would take MoM numbers of 0.0% to 0.1% to reach the 2% target in 2023 which although possible, would be a stretch. Adam wrote about the math in his post HERE. Required reading over the weekend.

A look at the US dollar changes this week with the major currencies shows the USD was lower vs all the major currencies with the largest decline vs the AUD and the NZD.

  • EUR, -0.38%
  • AUD, -2.08%
  • NZD -1.16%
  • GBP, -1.06%
  • CHF -0.62%
  • CAD, -0.59%
  • JPY, -0.36%

In other markets this week:

  • Crude oil fell -2.19% as growth concerns in China weighed on the price
  • Gold rose a modest 0.68% helped by the lower dollar
  • Silver rose 2.77%
  • Bitcoin fell $-651 which seems pretty good given the SEC suing Binance and Coinbase

In the US stock market, the NASDAQ rose for the 7th consecutive week and the S&P rose for the 4th consecutive week although gains were modest:

  • Dow industrial average rose 0.34%
  • S&P index rose 0.39%
  • NASDAQ index rose 0.14%

US yields moved higher this week, despite the lower dollar and expectations of no change from the Fed. Investors are bracing for an estimated $1 trillion deluge of Treasury issuance as part of the latest debt-ceiling resolution, and that may have led to some backup in yields especially in the shorter end this week.

  • 2-year yield up 9.5 basis points
  • 5-year yield up 7 basis points acting like no key she didn’t know you go to far just in the cell the didn’t know when to see you will you mind my mind you find my my window
  • 10-year yield up 4.7 basis points
  • 30-year yield was unchanged

Thank you for your support this week. Hoping you have a good weekend.

This article was written by Greg Michalowski at www.forexlive.com.

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NASDAQ index closes higher for the 7th consecutive week 0 (0)

The major US stock indices are closing marginally higher on the day and marginally higher for the week.

The NASDAQ’s gain this week was good enough for the 7th consecutive up week.

The final numbers are showing:

  • Dow Industrial Average 43.17 points or 0.13% at 33876.84
  • S&P index up 4.95 points or 0.12% at 4298.87
  • NASDAQ index rose 20.61 points or 0.16% at 13259.13

Looking at the small-cap the Russell 2000, fell 15.07 points or -0.8% to 1865.70.

For the trading week:

  • Dow Industrial Average rose 0.34%
  • S&P index rose 0.39%. The gain was the 4th consecutive higher
  • NASDAQ index rose 0.14%. The gain was the 7th consecutive up week. The index is up 12.3% from the low.
  • Russell 2000 gained +1.900% despite declines over the last 2 trading days of the week

A look at the top 3 sectors:

  • Technology up 0.46%
  • Consumer discretionary up 0.44%
  • Healthcare up 0.19%

The laggards today were:

  • Materials -0.82%
  • Energy -0.58%
  • Utilities -0.57%

For the trading week:

  • Consumer discretionary rose 2.44%
  • Utilities rose 1.92%
  • Energy rose 1.7%

on the downside this week

  • Information technology -0.66%
  • Consumer Staples -0.53%
  • Communications -0.41%

This article was written by Greg Michalowski at www.forexlive.com.

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US crude oil futures settle at $70.17 0 (0)

The price of the WTI crude oil futures is settling at $70.17. That’s down -$1.12 or -1.54%. The low price today reached $70.10. The high price was at $71.77.

For the week, the price fell $1.57. The price last week settled that $71.74.

Crude oil prices recorded a second consecutive week of declines, impacted by the strength of the US dollar and sparse news. Prices initially rose due to Saudi Arabia’s commitment to production adjustments but were later pressured by increases in US fuel stocks and disappointing Chinese export data. The surprise contraction in the Canadian labor market, coupled with weak Chinese inflation data, may have also contributed to the drop in prices towards the end of the week.

In the US, Baker Hughes recounts were little changed in the current week after steady declines this year. Oil rigs increased by one to 556, while natural gas rigs decreased by two to 135, resulting in a total decrease of one rig to 695.

Looking to next week, factors such as demand during the summer driving season and upcoming macro events like US CPI, FOMC, ECB, US Retail Sales, and BoJ will be key in determining oil price movements.

Meanwhile, the US Department of Energy (DoE) plans to issue a new solicitation to purchase an additional 3 million barrels of crude oil for the strategic stockpile. These barrels are scheduled for delivery in September. In August, the DoE awarded contracts for the purchase of 3 million barrels of crude oil for the Strategic Petroleum Reserve (SPR) at an average price of $73 per barrel.

This article was written by Greg Michalowski at www.forexlive.com.

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NZDUSD up today, but stalls near 38.2% of the May trading range 0 (0)

The NZDUSD moved higher today based on the lows against a swing area near the 0.60829 level before moving to the upside and breaking outside of what has been an up-and-down trading range until today (largely under the 0.6100 level).

The move to the upside today did extend the range for the week and moved up to test the 38.2% retracement of the May trading range. The retracement level came in at 0.61367 and that’s where the price stalled.

If the buyers are to take more control, getting above the 38.2% retracement is a minimum retracement level needed to show that they are serious about moving against the current trend. Absent that, the move to the upside is just a „plain vanilla“ correction.

So as we head into the new trading week, getting about 38.2% retracement will be needed going forward. If the price can move above that level the 200-day moving average at 0.6148 level would be the next close hurdle. The price in the NZDUSD has not been above the 200-day moving average since breaking below it on May 24. Move above that level and 50% of the same move down would be targeted at 0.61838

On the downside, failure to get above the 38.2% retracement would have traders thinking toward a retest of the 0.6100 level. Move below that level and the 100 and 200-hour moving averages will be in play (blue and green lines on the chart below).

So although the price is solidly higher in trading today, the buyers could not really break to the upside and give the buyers more confidence. As a result, traders will go into the new week with the continued battle between buyers and sellers in the NZDUSD pair.

This article was written by Greg Michalowski at www.forexlive.com.

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