Forex technical analysis: EURUSD scoots higher

Moves back above the 200 hour MA.  

The EURUSD has made a break back to the upside and in the process scooted above the 200 hour moving average at the 1.1196 level (green line in the chart below).  

Stock futures in the US are now down (they were up earlier today) and the market in this pair  at least, seems to be taking clues from the wiggles and waggles  of late (don't hold me to that though as it can change).   Technically speaking though....the price moved above the 200 hour MA and that is bullish.

Note that earlier today, the low held right on the 100 hour MA (blue line in the chart above). Traders were leaning against the risk defining levels and those traders who bought there are getting more satisfaction from the break higher. 

The low to high trading range is about 73 pips (135 is the 22 day average).  The range for the week is only 124 pips. This is the lowest trading range this year.  So that implies either we continue to go no where or we extend the range between now and the close on Friday.  The bias is more bulllish

1. Hold the 100 hour MA
2. Above the midpoint of the weeks range  at 1.11824. 
3. Above the 200 hour MA at 1.1196

Look for support at the 1.1196 area. If it can hold, there should be some more probing to the upside. Who knows, maybe the 200 day MA above (at 1.1253 might be breached.

GBPUSD messing with us

Not a concern, unless it is....

The BOE decision was highlighted by the headline that the "global events haven't altered MPC central view". Then came the "But".  That sentence read, "but the greater downside risks to the global environment merit close monitoring for any impact on domestic economic activity"  

The price moved to the 1.5450 level (good call Mike) and the started to come back down.  Looking at the daily chart, there are two 38.2% retracements on the chart. 

1. The nearer term fall from the August high to the September low at 1.5409
2. The one from the move up from the April 2015 low to the June 2015 high. That too comes in at 1.5409 

The high price on Tuesday reached 1.5411.  The high price yesterday reached reached 1.5404.  We are back below that level now and if the price is to go back higher. That level should be eyed.  

What does the intraday price action show?  Looking at the 5 minute chart the spike higher has led to a tumble lower and a move back to where it all started. The 1.5404-11 area (highs from Tuesday and Wednesday and the dual 38.2% from the daily chart - yellow area in the chart below) was raced through on the way up and has also helped to provide resistance after the fall back down.   Note that the 38.2% of the days range is smack in the middle of that yellow area as well (see chart below).  So fair enough to say, that is a key area for trading going forward. Move above it and we go higher.   

ON the downside, the tumble lower stalled at the low right before the decision and against the 100 bar MA on the 5-minute chart. Is this the downside support to base?  Well lets see claims and see if the dollar side wants to take charge.  There has been some damage left from the lap to the upside and downside.  The market is taking a breathe.

US initial jobless claims 275k vs 275k exp

Latest US initial jobless claims data 10 September 2015

• Prior 282k
• Continued claims 2.260m vs 2.250m exp. Prior 2.257m. Revised to 2.259m
• 4 week avg 275.75k vs 275.5k prior. Revised to 275.25

The labour dept said it estimated Hawaii claims data but no other special factors affected claims

Initial jobless claims 4 week average

Canada new housing price index July mm +0.1% vs +0.2% exp

Also out a few moments ago

• +0.3% prev
• yy +1.3% as exp/prev

USDCAD still 1.3268 and supported by softer data

Dollar dumps as US import prices drop the most in 7 months

There's no imported inflation coming in to the US anytime soon

The data wheel spins and this time it stops on prices

Petroleum prices crapped out 14.2% in August from -5.9% in July and are down 49.6% against last year. Industrial supplies fell 7.2% vs -3.2% prior and are -32.3% y/y

The low price problem is seen in exports also with drops across the board

It's one snapshot of inflation from an international and domestic view and not one that says the Fed is going to get any help getting CPI back to target

The dollar has taken that as a dovish signal for the Fed and USDJPY has fallen to 120.60 from just under 121.00

We've ticked off the ECB and BOE on the major CB list and only have the BOJ to come before the FOMC

The S&P 500 Hasn't Seen This Many 'All or Nothing Days' Since 2011

Here's another sign of just how extreme recent stock market trading has been.

As Bespoke Investment Group points out, "all or nothing days," or trading sessions when the number of advancing stocks minus the number of declining stocks in the S&P 500 reaches more than 400 or less than negative 400, has seen a huge pickup in recent months. August's dramatic selloff was a case in point, while last Monday's market dip saw 499 of the 502 stocks in the S&P 500 fall in tandem.

Here's Bespoke:

Since the sell-off really began in earnest on 8/20/15, the S&P 500’s daily advance/decline reading has been above +400 or below –400 on eight trading days through Friday (as of 2PM Monday, the S&P 500’s A/D reading is currently above +400 again).

On a rolling 12-day basis, Bespoke says we haven't seen this many "all or nothing days" since the selloff of 2011 or the financial crisis of 2008.

To put that in perspective, prior to 8/20 there had only been 13 trading days in all of 2015 where the S&P 500 had an all or nothing day. We looked to see how common it has been to see eight ‘all or nothing days’ over a 12 trading day period, and found that since our daily breadth data begins in 1990, these events have been extremely rare. In fact, the only two periods where we have seen this type of occurrence was during the financial crisis in late November/early December 2008 (where we saw five straight daily occurrences) and on one day during the 2011 correction on 10/6/11.

There is, however, a silver lining.

According to the note, the market tends to recover quite nicely, even if it does take a month or more. Here's a chart from Bespoke looking back at what the S&P 500 did following the last two instances. 

September 2015 Eurozone Sentix index 13.6 vs 16.1 exp

September 2015 Eurozone Sentix index data report 7 September 2015

• Prior 18.4
• Current conditions 15.0 vs 15.3 prior
• Expectations 12.3 vs 21.5 prior

Blimey, the euro is actually trading data points right now. 1.1149 trades from 1.1161 as investor confidence slips more than expected

That's also a huge drop for expectations and that's coming mostly on China. Sentix note that respondents see the negative effects of China far eclipsing any domestic positivity in Europe

It shows how fragile firms in the Eurozone are feeling right now

Eurozone Sentix investor confidence index