December 9, 2022

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Crude oil falls below $70 but rebounds on Mideast tensions. US dollar lower on the day

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Forex news for North American trading on August 3, 2021

The price of oil had a down and up ride today as concerns about a covid slowdown and mid-east (Iranian?) tensions weighed on prices before lifting them back up.  The run to the downside took the price of crude back below the $70 level to a low of $69.18, before the rebound back higher (the price is trading at around $70.50 currently). Nevertheless, the price is still down about $80 on the day or -1.11%.  

Forex news for North American trading on August 3, 2021

The run to the downside, helped to kick the CAD lower. It started the day as the weakest of the majors, and remains the weakest at the end of the day.  On the other extreme the NZD and the AUD are the strongest of the majors. For the NZD, the government announce that they would look to slow the housing market, by tightening the lending standards.  It was further boosted along with the AUD after the Reserve Bank of Australia announced no changes to its QE/tapering plans for the time being. They brushed aside the recent virus outbreak by saying that IF it gets contained then the economy would be able to bounce back quickly.  Of course it is the “IF” that matters, but the market went with expectations all will be ok, and the RBA taper is on track.  

The USD, meanwhile was mostly lower today weighed down by the lower oil and despite better Factory orders/durable goods orders (1.5% vs 1.0% estimate).  

In the debt market today, US yields were marginally lower with the 30 year down -0.8 basis points. The 10 year yield is trading at 1.172%, above the 1.154% low for the day but below the high at 1.200%.

US yields are marginally lower marginally lower

In the US stock market, the major indices closed higher and near the highs for the day. The S&P index closed at a new record high after rising 35.99 points or 0.82% to 4423.15. The intraday record high as 4423.79.  The Dow industrial average rose by 0.8%. The NASDAQ index increase by 0.55%. 

US stocks advanced and close near the high for the day

In the European equity market, the major indices closed mostly higher. The German Dax is down about -0.1% and the Italy’s FTSE MIB closed near unchanged. The best performer was the France’s CAC which rose by 0.7%.

European indices

Looking at the technicals of some of the major currencies going into the new trading day:

  • EURUSD: The EURUSD is trading around 1.1862 at the close of trading today. That keeps the price below its 100 hour moving average 1.18723 (the MA is still moving higher.  It will take a move above the 100 hour moving average to tilt the bias more to the upside. On the downside, teh low price on Friday and again today stalled ahead of the 38.2% retracement of the move up from the July 21 low at the 1.18482 level. The low today reached 1.18529. The low from last Friday reach 1.18507.  A break below the 38.2% retracement would have traders looking toward the rising 200 hour moving average at 1.1832.
  • AUDUSD: The AUDUSD is trading around 0.7398, just below the 38.2% retracement of the July trading range at 0.7407.  In the new day, if the price is to move higher, getting above that retracement level and the high from last week at 0.7413 is required to open the door for further gains. On the downside, the 100 hour moving average comes in at 0.7373 and the 200 hour moving average comes in at 0.7369. It would take moves below both to tilt the bias lower. The AUDUSD has been trading a 97 pip trading range however the last nine trading days. That is not a big range.  At some point, the ups and downs will discontinue and the market will trend.  The current price is closer to the higher extreme (the lowest low is at 0.73165), but it will still take a break and move above or below the upper or lower extreme.  Australian retail sales will be released in the new day.
  • USDCAD: The USDJPY would above its 200 hour moving average as crude oil started its run to the downside, at the 1.25268 level. Right around that level is a key swing area near 1.2525. The current price is at 1.2534. In in the new day it will take a move below those levels to tilt the bias back to the downside. Absent that, and the short-term tilt is still in favor of the buyers against support.  On the topside, the 200 day moving average of 1.25894 remains a key upside target. 
  • GBPUSD: The price of the GBPUSD traded above and below its 100 hour moving average and 100 day moving average for the 3rd day in a row. Both those moving averages are now converged near 1.3921. The current price is just below that level I.3915.  Although the price action in the pair has been choppy and above and below the levels, they still represent barometers for bullish or bearish bias.  Move above with momentum would be more bullish.  Move below with momentum is more bearish.  On the downside, the 200 hour moving average would become the next target at 1.3863. The price has not traded below the 200 hour moving average since July 26. On the topside the double top from last week’s trading at 1.39827 are the upside targets.  

Tomorrow the US ADP report will be released at 8:15 AM ET with expectations near 700 K. It will act as a barometer for the jobs report scheduled for release on Friday at 8:30 AM ET.

Also of significance is the scheduled speaking engagement of Fed Governor and Vice Chair Richard Clarida.  The market will be focused on the  timetable for his expectations for a taper.    




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