Forex news for North American trading on March 25, 2021.
A snapshot of some of the markets into the North American closes shows:
- Gold down $7.13 or -0.41% at $1727.55
- Silver down unchanged at $25.08
- WTI crude oil futures down to dollars and $0.71 or 4.43% at $58.47. The low for oil reached $57.44 before rebounding modestly into the close.
- Bitcoin is down $-1794 or -3.32% at $52,221. The high for the day reached $54,219.13. The low for the day reached $50,305.
The initial jobless claims came in at 684K for the current week. That was the lowest cycle low since the pandemic shutdown. The level is still above the prepandemic levels in the 260 to 282K level. However, it is a step in the positive direction. The prior week claims was revised to 781K from 771K previously reported. Last week’s data corresponded with the BLS survey for the next employment report. That was still lower from the prior month, but still higher than the values this week (for what it is worth)
In other data today, the 4Q GDP was revised higher to 4.3% from 4.1%. Inventories contributed to the gains. Although better on the surface, the market is more concerned about later vs last quarter (or even the 1Q which is coming to an end. With the added fiscal stimulus increasing the debt burden, the bet is growth down the road (with higher corporate taxes) will start to lower those deficits. Of course the US budget is swimming upstream as a result of things like Social Security and Medicare which will only cost more and more, but it is also important to keep the deficit in sight. Higher GDP is needed.
From the Fed officials today:
- Vice Chair Clarida, Evans and Barking reiterated the Feds new policy framework that inflation can run hot, and they expect it to move higher as well (due to year ago effects), but that they do not expect rises to be permanent.
The comments are congruent with the Fed Chair (maybe not the market, but time will tell who is right).
The US debt market was trading near unchanged generally, into the treasuries auction of $62 billion of seven year notes. Recall from last month, the auction went horribly with a 4.4 basis point tail and the worst to bid cover on record. Today’s auction was better (thank goodness it wasn’t worse) but still had a tail of 2.5 basis points, and the bid to cover was not all that great either. As a result yields backed up. The 10 year is up 1.8 basis points at 1.626% (the low reached 1.588%). The 2-10 year spread widened to 148.94 basis points from 146.19 basis points at the close yesterday.
In the forex, a snapshot of the strongest to weakest is showing GBP as the strongest and CHF as the weakest. The USD is mostly higher with the dollar rising by 0.40% to 0.47% vs the EUR, JPY and CHF. The dollar was unchanged vs the AUD and lower against the GBP. The GBPUSD rose for the 1st time in 6 days.
A look at some of major currency pairs technically:
- GBPUSD: The GBPUSD rose for the first time in six trading days. The pair corrected up to 1.3745 which is the low of a swing area between 1.3745 to 1.3758 going back to swing highs from the end of January to the beginning of February when that ceiling was broken. Yesterday, the price cracked below that area. Today on the corrective move higher, the pair has stalled against the area. Stay below in the new day, keeps the sellers in control. Move above and sellers fail on the break, and we should see a move back up.
- EURUSD: The EURUSD moved to the lowest level since November 12. Recall from yesterday, the price moved away from its 200 day moving average on the downside. That moving average currently comes in at 1.18546. The current price is at 1.17449. Technically, the price move below a trendline connecting the February and March lows at 1.1770. On the downside the swing low from. Stay below that level in the new trading day and sellers remain in control. On the downside the swing low from November 11 comes in at 1.17449.
- USDJPY: The USDJPY moved up to a high price of 109.24. That tested the low of a topside swing area between 109.23 and the 2020 high at 109.357. That high area has stalled the price over the last 14 trading days . On the downside, the 108.328 to 108.396 has stalled the downside over the same 14 days. The price moved off that high area to a NY afternoon session low at 109.075. The current price is trading at 109.175. The 103 pip trading range over the 14 days is narrow, non trending and will extend at some point. PS the range this week is only 84 pips.
- AUDUSD: The AUDUSD is closing below its 100 day MA for the second consecutive day. The moving averages at 0.7617. The current price is at 0.75758. The pair also is below a head and shoulders formation that cuts across currently at 0.7652 (in the new trading day). The break of each of those levels has the sellers in control and looking for more downside correction.