Forex News for North American Trading August 26, 2020
United States June Durable goods orders surprise on the upside with a gain of 11.2% vs. 4.7% expected. Data may have been influenced by superior defense aircraft parts (up 77%). But the other breakdown, including excluding transportation, ex-air non-defensive capital goods orders and ex-air non-defensive capital goods shipments are also estimates. In addition, the revisions were higher. The overall report was therefore solid.
US stocks open mixed with the Dow industrial average falling, the S&P almost unchanged and the NASDAQ index rising. At the end of the day, all 3 indices closed near their highs of the day, with the NASDAQ index leading the charge with a gain of 1.73%. This index is up 30.0% over the year. The S&P index also gained more than 1% (+ 1.02%). The NASDAQ and S&P closed at record highs and hit new intraday highs again.
The Dow industrial average lagged but still rose 0.3%. In the process, the index reached less than 1% of the 2019 closing level.
European stocks also closed higher with the German DAX leading the way with a gain of nearly 1% on the day below is a summary of ranges and changes for major stock indices in Europe and North America.
In forex, flow risk helped propel the NZD and AUD higher, with the NZD being by far the strongest of the majors. On the downside, the CHF, EUR and USD battled for the weakest of the majors, with the CHF winning this race. Below is a rank of the major currencies along with each currency’s percentage changes against it. One and the other.
From a technical point of view:
- EUR USD. EURUSD fell early in the New York session with price dipping below swing support between 1.17795 and 1.17837. The low reached 1.17714, coming back higher. The rise stalled near the 38.2% retracement of the downward movement from August 18 high to August 21 low. This level reaches 1.18342. The price is currently trading at 1.18309. On the new trading day, breaking and staying above the 38.2% retracement level would target the 200 hour moving average of 1.1848. Exceeding this level would open the door to new upward momentum. On the downside, look at 1.1801 to 1.18117 for support. If the 1.1800 below was broken a return to the 1.17795 level would be in the charts
- GBPUSD: GBPUSD is closing in a resistance zone defined by January and March swing highs between 1.3199 and 1.32116. The price is currently trading at 1.3211 as the end of the day approaches. Going above this swing zone was not a problem last week as 4 of the 5 trading days traded above and below the level. The problem is to stay above the level for buyers. New day traders will use this level as a barometer of bias. Going above and staying above is more optimistic. Staying below would be more bearish
- USDJPY: USDJPY is trading at 105.97 in the close. That’s just above the 200 hour moving average at 105.95, but below its 100 hour moving average at 106.00. The narrow 5 pip spread between the 2 moving averages has both the buyers and sellers know how far the new day will push the price. Today sellers were more in control with USDJPY falling -0.38% on the day.
- NZDUSD: The NZDUSD is trending higher today and also closes near its daily highs at 0.66222. At this level, the market price is testing a trendline of the upper channel on the daily chart. Like GBPUSD and USDJPY, traders will watch this level for indices defining the biases. To go above would be more optimistic. Staying below would be more bearish
- USDCAD: The USDCAD it closes lower. However, sellers have more strength to hedge in the final hours of trading after the day’s low wiped out the Aug 19 low at 1.31324 and Aug 24 low at 1.3134 from just 1.3134. a few pips. The inability to keep momentum down, led to short coverage in the close. The price is currently trading at 1.3148. In the new trading day, watch 1.3158-1.3170 as potential resistance. Stay below and we should see a breakout of the floor between 1.3131 and 1.3134. On the top, move above 1.3168 and a retest of the 100 hour moving average at 1.3186 and the 200 hour moving average at 1.3193 would be considered.
In summary, in other markets today:
- Spot gold rose $ 26.17 or 1.36% to $ 1,954.38. It’s near the high price of the day
- The cash is $ 0.89 or 3.39% higher at $ 27.42. It’s also close to the high price of the day
- WTI crude oil futures are up $ 0.07 or 0.16% from $ 43.42. The price remains above its 200-day moving average at $ 43.25, keeping buyers more in control.
In the US debt market, the US Treasury managed to auction 5-year notes with a tail of -0.9 basis points and a strong bid / cover ratio. This helped push rates down to their high intraday levels today.
Tomorrow at 8:30 am, the first jobless claims in the United States are expected to show a gain of 1 million for the week. This comes from a gain of 1,106 million last week. The United States advances the trade balance in goods and personal income / personal expenditure. At 9:10 a.m. ET, Fed Chairman Powell will speak at the Jackson Hole Virtual Symposium. The focus will be on whether the chair foreshadows a change from inflation guidelines to an average inflation target. At 10 a.m., the University of Michigan’s final sentiment reading for August is expected to be 72.8. This is up slightly from 72.5 in July.