It was a case of deja vu in NY trading as the price action looked eerily similar to the prior two days. Risk was better bid early on in the session on the back of more upbeat economic data. Durable goods orders jumped 4.9% in July after a -1.3% decline the prior month and this blew away market forecasts. Later on, new home sales also improved much more than anticipated to 433K units in July after an upwardly revised 395K the previous month. This sent stocks to the intraday highs of up 0.5%. The rally would fade and equities eventually closed flat on the day. The daily candles for stocks in the last three days suggest major indecision at current levels. It could very well be that the market is in the process of putting in a short-term top here. If past is prescient, any relapse in equities should help support the US dollar near-term.

The decline in stocks saw EUR/USD squeeze down to a session low 1.4207 before recovering back towards the initial 1.4250 breakdown point. We still expect decent sellers to emerge on moves back into the 1.43 area. It was a chopfest in the yen currencies and EUR/JPY traded mostly sideways after collapsing to 133.90 lows. The commodity complex remained heavy and a higher build in oil inventories did not help matters. Weekly oil stockpiles rose 128K barrels while the market was expecting a draw of -1.15M. This helped keep oil well below the $72 mark and left AUD and CAD trading with a heavy tone.

Little to chew on in the upcoming Asia session now besides New Zealand trade numbers. The market is looking for the trade balance to print -150M for July after a -417M result previously. A worse than anticipated number should see Kiwi test the 200-hour sma support which sits at 0.6777 currently. On the flipside, look for strength on a break above 0.6830.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 8/26 22:45 GMT NZ  Trade Balance  JUL  -417M  -150M
  • 8/26 22:45 GMT NZ  Imports  JUL  3.62B  3.30B
  • 8/26 22:45 GMT NZ  Exports  JUL  3.20B  3.15B
  • 8/27 0:00 GMT AU  Conference Board Leading Index  JUN  -0.10%  - -
  • 8/27 1:30 GMT AU  Private Capital Expenditure  2Q  -8.90%  -5.00%