Article / 27 March 2018 at 22:21 GMT

US Wrap: US dollar rallies, Wall St takes a tumble

FX Trade Strategist / www.Loonieviews.net
Canada
  • Tech stocks crash and Wall Street sank on Wednesday
  • Mixed US data turned out be a non-factor for forex traders 
  • Pre-month end dealing impacted markets
  • The release of GDP data for the UK could affect GBPUSD today
By Michael O’Neill

NY Focus
: Wall Street is behaving like it's on a trampoline. Tuesday’s bounce and all the optimism that went with it came crashing down on Wednesday. But it didn’t start out that way. The three major indices were in positive territory until lunch time, and then things soured. The Nasdaq plunged 2.93%, erasing nearly all of yesterday’s 3.26%. The drop in stocks drove Treasury yields lower. It wasn’t all bad news. General Electric (GE: NYSE) jumped 4.27% on a rumour that Warren Buffet was taking a look at acquiring a stake in the company.

Trade tensions may have eased somewhat, but they are still on the front burner. Bloomberg reported that the White House is looking at cracking down on Chinese investments in technology.

nnn
















China's technology-minded population will feel the impact of any moves by Donald Trump to build a great big wall around US technology such as 5G wireless telecommunications. Photo: Shutterstock

The US dollar opened with a bid and Sterling was under pressure. GBPUSD started to slide at the European open, and it kept on going until just after breakfast in New York. Prices bottomed out at 1.4068 and inched higher in the morning, peaking at 1.4172 at noon and trading sideways in the afternoon. There were no particular catalysts for the move although the prospect of pre-month end demand for dollars cannot be ruled out.

EURUSD traded in similar fashion as Sterling. New York inherited a falling EURUSD, which opened at 1.2413. It found support at 1.2373 and bounced back to the opening level at lunch. Prices drifted slightly lower in a dull afternoon session. Soft data releases about the Eurozone may have undermined the single currency. Second-tier US data didn’t play a role.

USDJPY chopped about in a range between ¥105.35 and ¥105.89, finishing the day at the low end of the range due to a whiff of risk aversion stemming from the decline on Wall Street.

AUDUSD opened under pressure and never recovered falling from 0.7724 to 0.7677. NZDUSD bounced in a 0.7260-0.7286 range, pressured by broad US dollar strength.

WTI oil prices broke below minor support at $65.00/barrel and dropped to $64.63/b. Month-end actions and rumours of a large US crude inventory build undermined the oil price. The rumours turned out to be true. API weekly crude stocks change report showed a rise of 5.32 million barrels.

Wednesday Focus: UK GDP for the fourth quarter of last year (forecast at 1.5%, or up 1.4% in y/y terms) along with mortgage approval data and other minor releases could lead to a volatile GBPUSD trading session.

GBPUSD snapped the uptrend from March 19 with today’s break below 1.4185. Further weakness below 1.4065 will extend losses to 1.3920.

Four-hour GBPUSD chart
saxo












Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more. 

– Edited by Robert Ryan

For more on forex, click here.

Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Loonieviews.net. Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.
1y
Market Predator Market Predator
Thanks, great as usual. Today, some guys announced their end here on TF. Hope you will keep going Mike!

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Tradingfloor.com and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Tradingfloor.com is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Tradingfloor.com or as a result of the use of the Tradingfloor.com. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail