The US day started with yields lower. The USD was mixed. Traders focus was on the CHF which was selling after the Swiss National Bank cut rates surprisingly. For the US dollar, traders were still thinking of the Fed rate decision and dot plot from the day before where the Fed kept 3 cuts on the table for 2024.
Early in the session, the Bank of England kept rates unchanged, but there was a dovish tilt to the statement and comments. That helped to strengthen the greenback – weaken the GBP – vis-à-vis the other currencies. Then it was time for US data and most of it was stronger.
- US initial jobless claims for the week came in at 210K. There is certainly not any worry about weak employment in the US. The claims data was for the survey week for the BLS monthly jobs report to be released the first week of April. So, that is a positive “tell” that jobs will likely remain solid.
- Philadelphia Fed business index was positive at 3.2 versus -2.3 expected.
- US PMI flash was a bit weaker than expected but still above the 50.0 level at 51.7 (versus 52.0 expected)
- Existing home sales were much stronger than expected at a 4.38 million annual sales pace versus 3.94M last month
All would help to push yields back to the upside, and strengthen the US dollar in the process. Near the end of day, the USD is the strongest of the major currencies. The CHF is the weakest followed closely by the GBP.
The strongest to weakest of the major currencies
Technically,
- The EURUSD is trading just below its 100-day moving average at 1.08608. Traders will be targeting its 200-day moving average and 50% midpoint in the new trading day. That level comes in at 1.08374. On Tuesday and Wednesday, the price tested those levels only to bounce to the upside.
- The GBPUSD fell below its 100 bar moving average on the 4-hour chart at 1.2734, the 50% midpoint of the range since the February low at 1.2705, and the 200 bar moving average on the four hour chart at 1.2676. Looming below as the next key targets in the new trading day are the 100-day moving average at 1.26256, and its 200-day moving average at 1.2593. The 200-day moving average also corresponds with a low swing area at the same level – increasing the levels importance.
- The USDJPY after testing swing highs from 2023 and 2022 yesterday (getting within 10 and 15 pips of each) at 151.94 and 151.81 respectively, the price of the USDJPY fell in the Asian to 150.258 before starting to rotate back higher . After moving back above a swing area ceiling going back to February between 150.70 and 150.86, the price was able to stay above the upper end of that swing area and push even higher helped by the stronger US fundamentals. The high price reached 151.73 which was short of the high from yesterday at 151.81, but still within shouting distance of the 2022, 2023, and the 2024 highs between 151.81 and 151.94. In the new trading day those highs will be key for the future direction for the pair. Stay below keeps the sellers in play. Move above and the USDJPY will be trading at the highest levels since 1990 (yes 1990).
- The USDCHF continued its run to the upside in the US session after the central banks surprise interest rate cut. The diapers extended to the law of the next swing area between 0.8986 and 0.9017. The high price reached 0.8993. In the new trading day, getting above the natural resistance at 0.9000, in the high of the swing area at 0.9017 would be needed to increase the bullish bias.
- The AUDUSD moved higher in the Asian and European session on much better employment statistics from Australia. However, later the stronger US fundamentals helped to push the price back to the downside on US dollar buying. The AUDUSD move down to test the key 200-day moving average near 0.6556. The price stalled at 0.6559. In the new trading day: getting below the 200 day moving average and staying below would increase the bears bias for the AUDUSD.
In other markets, US stocks closed at record levels but off their highest levels of the day. The final numbers are showing:
- Dow Industrial Average 269.24 points or 0.68%. At session highs the index was up 376.91 points.
- S&P index up 16.91 points or 0.32%. At session highs the S&P index was up 36.47 points
- NASDAQ index up 32.42 points or 0.20%.. At session highs, the NASDAQ index was up 169.46 points.
In the US debt market:
- 2-year yield 4.642%, +3.9 basis points
- 5-year yield 4.256% +1.4 basis points
- 10 year yield 4.260%, unchanged
- 30-year yield 4.434%, -0.2 basis points
Looking at other markets:
- Crude oil is trading down $0.56 or -0.73% at $80.86
- Gold fell $-4.88 or -0.22% at $2181.
- Bitcoin fell to $65,226. At the start of the New York session the price was at $67,025