Forex news for NY traders on June 13, 2018

In other markets, the snapshot at the end of day is showing:

  • Spot gold is higher by $3.40 or 0.26% at $1299.35
  • WTI crude oil futures are higher by $.27 or 0.41% at $66.63. The price rise was helped by a drawdown in inventories earlier today
  • Bitcoin continued to move lower. It is trading down $280 at $6256. There was a research report suggesting manipulation in the price of the digital currency.
  • US stocks ended the session in the red: S&P fell -0.40%. NASDAQ fell -0.11%. Dow industrial average fell -0.47%
  • European stocks ended mostly higher in trading today
  • US yields are higher in the shorter end: two-year 2.57%, +3.0 basis points. Five-year 2.834%, +2.5 basis points. 10 year 2.972%, +1.1 basis points. 30 year 3.09%, -0.3 basis points. The 10 year yield moved briefly above the 3.0% level after the Fed hike, but fell back subsequently.
  • European yields were mostly lower trading today

In the forex market, the EUR was the strongest at the end of day snapshot, and the GBP was the weakest.   

Having said that the only consistent in the ranking was that the GBP remained the weakest from the start of the day.  However, having said the losses by the end of the day against the major currencies were lower with the exception of the EUR.

The USD ended lower with most of the declines coming against the EUR. That was despite an expected hike by the FOMC and a rise in the expectation of further hikes in 2018 to 4 in total from 3 previously.  

The Fed decision was the major release of the day. Yes, there was PPI released earlier but despite a larger than expected rise, the dollar fell into the US Fed rate decision.

The Fed decision came in as expected. 

  • The Fed raised by 0.25% to 1.75%-2.0% as the target range

Maybe open for debate was the expectations for the dot plot and the central tendencies.  Overall, all were reflective of a stronger economy:

  • The Fed now expects that 4 total hikes are needed in 2018
  • The end of year forecast for employment was lowered to 3.6% from 3.8% (it is currently at 3.8%).
  • The end of year GDP was raised to 2.8% from 2.7%
  • The core PCE forecast was raised to 2.0% from 1.9%. The headline PCE was raised to 2.1% from 1.9%

The better view initially sent the dollar higher, but then back lower. 

  • The EURUSD fell toward a support swing area at 1.17268-32 (the low reached 1.17243) and bounced. The ECB is tomorrow and perhaps Draghi and Co. threatening to start to tape QE, the price moved all the way to new day highs at 1.1793 before finished.  A trend line cuts across at 1.1792 and that is where the price is settling.  
  • The GBPUSD fell toward a lower trend line at 1.3319, where support buyers came in and took the price back tower the 200 hour MA at 1.3382 (the high stalled at 1.3383). With the 200 hour MA at 1.3382 and the 100 hour MA at 1.33847, that area was good enough to stall the rally. The price is settling at around 1.3371.
  • The USDJPY spiked to new session highs of 110.84 but fell short of the next target around 111.06 (trend line on the daily).  By the end of the day, the price had moved down to 110.26. That happened to be the swing high from last week’s trading. The 100 day MA is just below at 110.21. Keep that level in mind in the new day.

So traders whipped it around but for the most part followed some technical clues.  Having said that you had to be quick.  

In a week where their have been a lot of news (G7, US-N. Korea, CPI, PPI, FOMC, UK employment, Brexit amendment votes), the trading has for the most part been chopping and sporadic. We now head into another day that starts with Australian Employment, and will have SNB and ECB rate decision. The ECB will be the main focus as they have threatened to start QE taper.  After that, let the World Cup games begin.  

If I thought markets have been choppy this week, what will the next three weeks be like as summer and World Cup takes the wind out of the market volatility?  HMMMMM…

Have a great day, evening, night…. 

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