Forexlive Americas FX news wrap 26 Nov. The USD moves marginally higher. Housing mixed.

• US equity close. Big bids arrive late.
• With all the focus on Bessent, are we underestimating Kevin Warsh?
• Biden touts Israel-Lebanon ceasefire
• Could Trump lean on a weaker dollar as is main policy lever?
• Are we in a bubble? Where 5 measures of market sentiment stand
• A look at the Fed minutes by separating references to groups of “participants”.
• FOMC Minutes: Many said uncertainty over neutral rate made it appropriate to move slowly
• No help from OPEC reports: Oil slumps
• Trump’s plan to impose 25% tariffs on Canadian and Mexican imports doesn’t exempt oil
• US treasury auctions off $70 billion of five year notes at a high yield of 4.197%
• Israel cabinet approves cease-fire deal with Lebanon
• Mexican finance minister: Tariffs are a tax and would hurt both countries
• Secretary of State Blinkin: Going into 2025 Ukraine has money, munitions & forces
• RBNZ rate decision in the new day and the NZDUSD is breaking to a new low. What next?
• European equity close: The return of Tariff Man bites
• BofA: Gold faces near-term headwinds but potential for $3,000 in 2025
• Bitcoin continues its correction lower today from near 100K levels. What next technically?
• Dallas Fed Texas services outlook +9.8 vs +2.0 prior
• US October new home sales 0.610m vs 0.725m expected
• US November consumer confidence 111.7 vs 111.3 expected
• Richmond Fed composite index for November -14 versus -10 estimate
• Kickstart the trading day with a technical look at the EURUSD, USDJPY, GBPUSD & USDCAD
• G7 draft: Ministers concerned about China’s non-market policies and overcapacity
• Case Shiller 20-city September US home prices +0.2% m/m versus +0.3% expected
• BOC’s Mendes: We will incorporate political policies once we actually see the specifics
• Tariff man has lost his fastball
• The USD is mostly lower. Yields are higher. What are the charts telling traders in majors
• BoC’s Mendes: Inflation will fade into the background as it settles at 2%
• Forexlive European FX news wrap: Positive risk mood despite Trump’s tariffs threats

Markets:

• Gold up $7.65 or 0.29% at $2632.30
• US 10-year yield 4.300%, +3.7 basis points
• US 2-year yield 4.256%, +0.4 basis points
• WTI crude oil down $0.34 or -0.50% at $68.61
• S&P 500 rose 34.23 points or 0.57% at 6021.60. The S&P closed at a new record high
• NASDAQ rose 119.46 points or 0.63% at 19174.30.
• Russell 2000 fell -17.79 points or -0.73% at 2424.23 . The index closed within one point of a new record high going back to 2001 yesterday but could not close higher today
• Dow rose 123.74 points or 0.28% at 44860.31. The price closed and another new record high

The US dollar is closing mostly higher. The dollar index is up 0.18% on the day. The dollar however did fall sharply versus the JPY (-0.73%).

• EUR, +0.11%
• JPY -0.72%
• GBP, +0.08%
• CHF +0.09%
• CAD +0.56%
• AUD +0.65%
• NZD +0.33%

The economic calendar so K Shiller home prices rise 0.2% versus 0.3% estimate. The Year on year continued its streak (has not been negative since June 2023) of rises with a gain of 4.6%. However, the gain was lower than the 4.8% estimate and 5.2% last month. The monthly home price data from FHFA rose 0.7% vs 0.4% last month and 4.4%, unchanged from 4.4% last month. The theme of housing data continued with New-home sales plunging to 0.610 million annualized units from 0.738M last month. The annualized sales pace was the lowest since December 2023.

Consumer confidence for November came in higher than last month at 111.7 vs 109.6 and above the estimate at 111.30. The Richmond Fed composite index came in unchanged but negative at -14. The services index did rise to 9 from 3 last month.

The US treasury auctioned off $70 billion a five year notes successfully with domestic demand for outpacing the six-month average. The international demand was light however. Nevertheless, the bid to cover was higher than the six-month average and there was a negative tail vs the WI level at the time of the auction.

Yields moved higher today with more of a positive yield curve

• 2-year yield 4.256%, +0.4 basis points
• 5- year yield 4.184%, +1 point basis points
• 10 year yield 4.292%, +3.0 basis points
• 30 year yield 4.464%, puzzle .8 basis points

The Federal Reserve meeting minutes were released today. Some of the points:

• Future Policy Path: Gradual shift toward a neutral stance is likely if inflation continues declining toward 2% and the labor market remains strong.
• Economic Conditions: Economic activity expanded solidly; labor market conditions eased slightly, with unemployment ticking up but staying low.
• Inflation: Broad agreement that inflation is moving sustainably toward 2%, though monthly volatility is expected.
• Risks: Risks to employment and inflation goals are considered balanced.
• December Expectations: Majority anticipate a 25 basis point rate cut in December, following the November cut.
• Gradual Approach: Uncertainty around the neutral rate supports gradual policy adjustment to avoid excessive tightening or easing.
• Financial Conditions: Broad equity price indexes rose amid higher yields and stronger growth expectations.
• Pause Discussion: Some participants suggested pausing rate cuts if inflation persists but emphasized this as a contingency.
• Market Implication: A gradual approach dominates, with the market pricing a 57% chance of a December rate cut.

Technically speaking:

EUR/USD

• The EUR/USD had a volatile day, moving down, then up, and back down.
• Session Low: Reached 1.0424 in the early Asian session following President-elect Trump’s announcement of proposed tariffs (25% on Canadian and Mexican imports, 10% on Chinese imports).
• Session High: Briefly rose above the 200-hour moving average during the early U.S. session, marking the first time since November 6.
• Sellers regained control, pushing the price below the 100-hour moving average at 1.0484.
• Closing Action: Price rebounded off U.S. session lows of 1.0456 to test the 100-hour moving average at 1.0484, which now acts as a key pivot:
  • Above: Signals bullish momentum.
  • Below: Indicates bearish control.

USD/JPY

• Closing Price: Near session low at 152.98, trading at 153.04 into the close.
• Key Levels:
  • The pair is below the swing area of 153.26–153.45, keeping sellers in control.
  • A move above this area would target 153.88 as the next upside level.
  • On the downside, the 200-bar moving average on the 4-hour chart at 152.65 and the 200-day moving average at 151.98 are key supports.

GBP/USD

• Session High: Stalled near yesterday’s high of 1.26137, just below the 200-hour moving average at 1.26199 (which is trending lower).
• Session Low: Dropped to 1.25239 during the New York session before rebounding toward the falling 100-hour moving average at 1.2581.
• Key Resistance:
  • 1.2581 (100-hour MA) remains a critical resistance level.
  • If breached, focus shifts to the 200-hour MA at 1.26199.
• Key Support: Staying below the 100-hour MA could lead to a retest of last week’s low at 1.24865.

NZD/USD

• Price action is influenced by the upcoming Reserve Bank of New Zealand (RBNZ) interest rate decision.
  • Expectations: A 50 bps rate cut to 4.25% from 4.75%.
• Session Low: Stalled near Friday’s low at 0.58142, with further support at 0.57974 (a new low since November 2023).
• Key Resistance:
  • The 200-hour moving average at 0.5862 capped gains today.
  • Sustained trading above this level is needed to strengthen the bullish outlook.

Good fortune with your trading.

This article was written by Greg Michalowski at www.forexlive.com.