Forexlive Americas FX news wrap 6 Aug: Yields higher as markets calm a bit.JPY still focus

• US stocks finish 1% higher but sellers took over in the final hour
• The Fed put worked
• US treasury auctions off $58 billion of 3-year notes at a high yield of 3.810%
• European equity close: A modest rebound
• Atlanta Fed GDPNow Q3 tracker 2.9% vs 2.5% prior
• US total household debt rose 0.6% in Q2 – NY Fed
• New Zealand GDT price index +0.5%
• Bitcoin catches a bid in rise above $56,000
• What would give buyers more hope in the broader US stock indices today and going forward?
• Nvidia leads tech surge: Current insights from the US stock market
• Kamala Harris has picked Minnesota Governor Tim Walz as her running mate
• Toronto homes listed for sale rise to the highest since the financial crisis
• Canada June trade balance +$0.64 billion vs -$1.84 billion expected
• US international trade balance for June $-73.1 billion versus $-72.5 billion est
• The USD is the strongest and the JPY is the weakest as the NA session begins
• Never get married to a trade

It was a rebound day in the markets today. After the sharp decline in the Nikkei yesterday (-12.4%), the index rebounded 10.23% of that decline setting the US equity market up for a rebound at the open.

Shares did open higher and after a dip in the first few minutes, the buyers did enter and pushed the major indices higher. However, late day selling in the last hour took some of the froth out of the move up.

The S&P is ending the day up 53.70 points. However, at the high the index was up 126.00 points to a high of 5312.34. What is disappointing for the buyers is that at the highs, the price did extend back above the 100-day MA at 5308.14, but is failing on that break.

For the Nasdaq index it traded up 420 points at the high but is closing up 166.77 points. At the highs, the price did get above a swing area between 16442 and 16538, but is closing below those levels at 16366.85.

With the Nikkei providing the roadmap for the first two days, the market will be sensitive to what happens in their market in the new day. Nevertheless, technically, the close was not the best given the failed technical breaks in trading today.

In the forex market , the AUD is ending the day as the strongest of the major currencies followed by the CAD. The GBP and JPY are the weakest. The USD is ending the day mixed with gains vs the GBP ((0.65%) and JPY (0.38%), offset by declines vs the AUD (-0.42%) and CAD (-0.34%). The other changes were modest.

The GBPUSD – although ending lower – had its share of up and down price action today. The pair started the day near the 200 bar MA on the 4-hour chart at 1.2807 area. The subsequent fall took the price to 1.2710 area before bouncing back toward the 1.2800 area. From there, sellers took over and pushed the pair to the 50% midpoint of the move up from the APril low to the July high. That level comes in at 1.26713 and the low for the day stalled near that level. Also in play is the 100 day MA at 1.26833. In the new trading day, if the price can move below and stay below that level, the sellers would add to control technically.

For the AUDUSD today, the pair also had a volatile up and down trading day after the RBA kept rates unchanged, but did say that they did talk about hiking and were keeping the door open if inflation did not come down. The pair was also helped by an abatement of the risk off sentiment due to the move higher in stocks for most of the day. Technically, the price is closing near the 200 hour MA at 0.6524. That will be a key barometer in the new trading day.

The focus will be on the USDJPY in the new trading day. On the topside, resistance held between 145.89 and 146.51 today which keeps the sellers in play. Going forward, it would take a move above that area to increase the bullish bias. Absent that, and the sellers are more in control in the pair.

In the US debt market today, the yields did move back to the upside as the panic from Monday abated (maybe the pricing in of 50 basis point cuts for September and November are a bit premature). Yields are up double digits on the day:

• 2 year yield 3.989T, +10.5 basis points
• 5 year yield 3.741%, +11.4 basis points
• 10 year yield 3.901%, +11.8 basis points
• 30 year yield 4.188%, +11.8 basis points

Crude oil is trading above and below unchanged at $73.02.

Bitcoin is trading higher at $56512, after trading at $49577 just yesterday as the volatility continues.

New Zealand employment will be released in the new trading day with the unemployment rate expected at 4.7% up from 4.3% last quarter. Tomorrow the calendar is light in the US with 10 year note auction and consumer credit later in the day. Crude oil inventories will also be released.

Back to Nikkei watching.

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