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Forexlive Americas FX news wrap 13 Sep: The stocks close with 5-day streaks.FOMC next week

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The Nasdaq and S&P ended the week with five straight days of gains.

As the day and week draw to a close, the Japanese Yen ended the day as the strongest of the major currencies and the New Zealand Dollar was the weakest. The US Dollar ended the day with a mixed performance with most of the declines coming against the Japanese Yen and Swiss Franc and gains against the Australian Dollar and New Zealand Dollar. The US Dollar was almost unchanged against the Euro, British Pound and Canadian Dollar today.

The NZD/USD pair fell today after hitting fresh highs near the 100-bar moving average on the 4-hour chart near 0.6195. The subsequent decline took the price down to the 100-bar moving average at 0.6151. The 100-hour moving average will be a key barometer for the pair in the coming week’s trading.

For the USD/JPY pair, it traded as low as 140.275 and in the process tested the December 2023 low of 140.248. The pair then rebounded to close at 140.90. With today’s low just a few pips away from the December 2023 low, traders may look at the area as a reliable double bottom for the new trading week.

For EUR/USD, today’s bullish price action was capped at the August swing zone between 1.1097 and 1.11042 (see red numbered circles). The move lower has the pair trading at 1.1072 near the weekly close. The 100-hour moving average at 1.1059 will be a key support target early next week. The swing zone up to 1.11042 will be the key resistance that needs to be broken to increase the bullish bias.

GBP/USD bulls took the price above the swing zone and the 100-bar moving average on the 4-hour chart at 1.31399, but they pulled back. The price is trading between that moving average and the 200-bar moving average below at 1.31104. Those moving averages will act as nearby support and resistance in the new week. A move below the 200-bar moving average would see the 100-bar moving average at 1.30844 face support. It would take a move below it to give the sellers more control.

Looking at the US yield curve, yields are lower today as the yield curve steepens. The spread between the 2-10 year is now 7.2 basis points, the most positive since June 2022. The spread between the 2-30 year is approaching +40 basis points, also the highest since June 2022.

A quick snapshot of returns near the end of the day shows:

  • 2-year yield 3.5886%, -5.9bps
  • 5-year yield 3.436%, -3.0bps
  • 10-year yield 3.658%, -2.1 bps
  • 30-Year Bond Yield 3.984%, -1.1bp

This week:

  • The yield on the two-year note fell by -5.4 basis points.
  • The yield on the 5-year note fell by -3.2 basis points.
  • The yield on the 10-year note fell by -2.0 basis points.
  • The yield on the 30-year note fell by -0.6 basis points.

US stocks staged a strong recovery after last week’s slide. The Nasdaq and S&P rose every day of the week, with the S&P up 4.02% on the week and the Nasdaq up 5.95%. The S&P fell -4.25% last week and the Nasdaq fell -5.77%. So let’s go back to the beginning of the calendar month. Remember, September is traditionally a negative month.

Next week, the Federal Open Market Committee meets (cutting rates by 25 or 50 basis points). The Bank of England and the Bank of Japan also meet, and are expected to keep rates unchanged.

US retail sales will also be released along with jobs data from Australia and CPI from Canada (see calendar here).

Thank you for your support this week. I hope everyone has a happy and healthy weekend. I wish your team a win.

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