Forexlive Americas FX news wrap: USDs the strongest currency as traders flock to safety |
The USD is started the US session and ended the NY session as the strongest of the major currencies. The JPY was also a stronger currency today. The NZD, AUD and CAD (commoditiy currencies) were the weakest. That combination of strong to weak is typical of a “flight to safety” trade an/or flight out of risk.
Lower stock market ahead of the FOMC decision on Wednesday when the Federal Reserve is expected to increase the taper and likely anticipate faster tightenings as well, along with concerns about the acceleration of the omicron virus and its economic impact, contributed to the flow.
Below is a chart of the strongest to weakest currencies. The USDCAD and NZDUSD were the biggest movers with changes of 0.68% in favor of the greenback.
US stocks traded higher for most of the pre-market trade, but at the open, shares were marginally lower. The Nasdaq index was the only index of the major three, that traded in positive territory, and even that, the gains were modest at 6.5 points. The S&P had an intraday high of -1.72 points. The Dow high was at -12.06 points. At the lows, the Dow was down -361.46 points or -1.0%. The S&P index was down -44.42 points or -0.94%, and the NASDAQ was down -222.40 points or -1.42%. Both the S&P and the NASDAQ index closed just off their lows for the day.
In Europe today, the major indices all closed lower with the German Dax the best performer at near unchanged. The UK FTSE 100 fell 0.83% is a struggle with the omicron virus.
In other markets today:
- Spot gold rose €4.60 or +0.26% at $1787
- Spot silver rose $0.16 or 0.73% $22.31
- WTI crude oil futures are trading at $71.20. The settlement price today was at $71.29. There was down $0.38 -0.53% from the settle price on Friday.
- Bitcoin is trading at $46,507. The high price for today stalled against its 200 hour moving average keeping the bears more control (see post here)
Some technical levels to eye in the new trading day:
- EURUSD: The EURUSD has the 100 and 200 hour moving averages at the same level at 1.1299. The price in the New York session took one look above moving averages but quickly reversed back to the downside. The prices trading near 1.12837 near the close for the day. The trading bias is to the downside below the moving averages. Targets include 1.12658 the low from today’s trading at 1.12595. Move above the 100 and 200 hour moving averages and then get above the 50% of the range since over 30th at 1.13044, and the door opens for further upside momentum.
- USDJPY: The USDJPY traded in a narrow trading range day with resistance against a topside trendline that cuts across now at 113.66, and support against the 200 hour moving average (at 113.373) . Those levels will be eyed in the new trading day for bias clues, with momentum expected in the direction of the break.
- GBPUSD: The GBPUSD took another shot at getting above the 200 hour moving average today. Recall on Friday, the price moved above that level for the first time since November 22, only to fall back below in the Asian session today. The rebound back above that 200 hour moving average (currently at 1.32484) in the late London/early New York trading session also failed. That led to a break below its 100 hour moving average 1.32259 and swing level support at 1.32201. The current price is trading at 1.3208. It would take a move back above the 100 hour moving average to tilt the bias back in favor of the buyers. Absent that, and sellers will eye the low from Friday’s low at 1.3186, the low from Thursday’s trade at 1.31698, and the low from Wednesday’s trade (and lowest level since December 2020) at 1.31588.