Forex Market Updates & Commentary |  |
- AUDUSD hold Fibonacci Support and bounces. Test intraday resistance now.
- August 12 2009 Forex Market Update - Part 2 MA’s
- USDJPY tests 200 day MA and bounces overnight
- US Trade Balance mixed in June.
- US Trade Balance is due at 8:30 AM
- GBPUSD moves back to closing level then moves lower
- US Mortgage Applications fell for the current week
- BOE’s King on rising unemployment
- BOE inflation report may miss 2% target
- Euro-zone industrial production not up to expectations
- UK employment data
- Usd/Jpy falls below 200 hour M/A
- BOJ Monthly Report; economy has “stopped worsening”
- 8-12 Economic Calendar
- AUD Wage Cost Index comes out as expected
| AUDUSD hold Fibonacci Support and bounces. Test intraday resistance now. Posted: 12 Aug 2009 06:42 AM PDT
The AUDUSD was pressured overnight on a declining China stock market. There is worry that China has its share of inventory now and may have to slow down purchases. This pressured the AUDUSD which was already feeling a downside bias after it broke trendline channel support yesterday (see 4 hour chart above). The ensuing move lower took the pair down to the 38.2% retracement support level of the move up from the low on July 13th to the high reached on August 4th. The retracement suppport came in at the 0.8175 price. The low reached 0.8179. From there, the price rebounded higher.
Looking at the 5 minute chart, the price has recently moved above the 200 bar Moving average at the 0.8251 level but has resistance also at the 0.8256 level which is the 61.8% retracement level on the daily range today. As a result, I would expect to see some profit taking selling. A move above will target the close from yesterday at the 0.8289 level. |
| August 12 2009 Forex Market Update - Part 2 MA’s Posted: 12 Aug 2009 06:33 AM PDT Click here to view the embedded video. Part 2 of our special training on Moving Averages. We review what took place on the 5 min timeframes overnight and then a look forward at the majors. |
| USDJPY tests 200 day MA and bounces overnight Posted: 12 Aug 2009 06:01 AM PDT
The USDJPY tested then moved through the 200 hour MA on the back of weaker China stock market and flight into the JPY as a result. The 200 hour moving average was broken at the 95.70 level. The price moved down to the 95.11 level where it ran into buyers against the 200 day MA (95.07). This level was a key level last week and helped propel the move to the 97.77 highs seen last Friday. Today it held strong on the downside. The market is now back higher. The topside of the old channel will be watched as upside resistance. That level comes in at 96.12 (daily chart below).
On the shorter term chart below the price wandered above and below the 100 bar MA. After trading between the “goal posts” as defined by the 100 bar MA and the 200 bar MA (blue and green line in the chart below), the price has moved to the upside. The 95.70 level is the 200 bar moving average. That price also currently corresponds with the 200 hour MA on the hourly chart (green line in the hourly chart above). As a result, it is a key level to watch this morning - above 95.70 bullish, below I would expect a move back to the downside.
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| US Trade Balance mixed in June. Posted: 12 Aug 2009 05:35 AM PDT The Nominal Trade Balance widened to -$27.008 billion from -$25.966. The Real Trade Balance meanwhile improved to -$35.948 from -$36.265 last month. This would imply an addition to 2nd quarter GDP. Imports and Exports were both higher Imports rose by 2.3%, while exports increased by 2.0%. This may suggest a rebounding or stabilizing global economy. |
| US Trade Balance is due at 8:30 AM Posted: 12 Aug 2009 05:16 AM PDT
The US Trade Balance is expected to widen to $28.7 billion in June. The rise is most likely due to the rising cost of oil imports in the month (prices were up 20% in June). In May the deficit reached -26 billion which was the lowest level since Nov 1999. A recovery in economic activity is also expected to increase deficits going forward as imports increase more than exports during recovery periods. A weaker dollar may help, as it makes exports more competitive abroad, but overall the US still relies on imported goods from low cost producers like China. If the deficit increases on a quarter on quarter basis, the effect on GDP is negative. The trade helped support the economy in the 1st half of the year GDP (or slow the decline). Also, take note of the Real Trade Deficit as this is what is used to calculate the GDP impact of the Trade Balance. In May, the Real Trade Deficit improved to -$36.182 billion. This was the lowest level since Dec 2001. |
| GBPUSD moves back to closing level then moves lower Posted: 12 Aug 2009 04:57 AM PDT
The GBPUSD came under pressure overnight after a dovish Inflation Report. The GBPUSD fell to a low of 1.6389. The high was reached earlier in the trading day at 1.6505. The current price remains below the close from yesterday at the 1.6478 level but above the double bottom from Friday and Monday at the 1.6430. Watch this level this morning.
The 5 minute chart is giving some clues for today. The price first moved lower today after moving below and away from the 100 and 200 hour MA after non-trending for the early part of the day (blue line 100 bar MA, and green line 200 bar MA going sideways and converged). The move down was followed by a quick move back higher to the 100 bar MA (blue line). After another test the price broke through and tested the green line or 200 bar MA. The move higher traded at the closing price from yesterday at the 1.6478 level, before reversing back below the 200 bar MA. In the last 15 or so minutes, the downside bias has been reestablished as the price has moved back below the 100 bar MA. That level comes in at the 1.6454 level currently. If a trend is to be reestablished to the downside, staying below this level will be needed. A break below the double bottom from yesterday and Friday at the 1.6430 will help confirm the downside bias. A move the 100 bar MA in the 5 minute chart, muddies the water again. On the downside, keep in mind the 1.6317 area. On the daily close chart below, this level was the floor during the June/July period. I would expect buyers against this level on the first attempt (see chart below).
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| US Mortgage Applications fell for the current week Posted: 12 Aug 2009 04:37 AM PDT The Purchase Index rose by 1.1%. The Average Rate for 30 year bonds rose to 5.38% from 5.17%. |
| BOE’s King on rising unemployment Posted: 12 Aug 2009 02:47 AM PDT BOE’s King sees UK unemployment rising for the forseeable future, as stated in a Q&A session after the inflation report. This keeps the pressure on sterling as Gbp/Usd now trading at 1.6409 and Gbp/Jpy at 157.10. |
| BOE inflation report may miss 2% target Posted: 12 Aug 2009 02:35 AM PDT BOE inflation report may miss 2% target, UK remains in deep recession despite encouraging signs. Gbp/Usd sold off 40 pips on heels of statement , currently trading at 1.6420. |
| Euro-zone industrial production not up to expectations Posted: 12 Aug 2009 02:04 AM PDT Euro-zone industrial productions m/m came in at -0.6%, worse than the 0.3% expected and 0.5% prior reading. Y/y came in at -17.0%, worse than the -16.4% expected. Not encouraging numbers for the Euro which has been under pressure most of the session. Eur/Usd now trading at 1.4112, off about 10 pre-numbers. |
| Posted: 12 Aug 2009 01:33 AM PDT UK Claimant count rate came in at 4.9% as expected Jobless claims change was 24,900, better than the 28,000 expected ILO unemployment rate came in at 7.8% , better than the 7.7% expected Average earnings index 3m/y came in at 2.5%, better than the 2.3 % expected. No major impact on these employment figures, though you would think it would be positive for Gbp. Gbp/Usd still trading at pre-number levels 1.6425. |
| Usd/Jpy falls below 200 hour M/A Posted: 11 Aug 2009 11:33 PM PDT Usd/Jpy has fallen below its 200 hour M/A and 61.8% Fibo of previous low (94.35). Since trading up at 97.78 on Aug. 7th the pair has been on a methodical decline. Breaking below its 200 hour M/A is further confirmation of its now bearish tone. If current trend continues there is not much support between current levels and 94.35.
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| BOJ Monthly Report; economy has “stopped worsening” Posted: 11 Aug 2009 10:18 PM PDT The BOJ monthly report states the economy has ’stopped worsening” and the economy is likely to turn upward over time. Global economic conditions are improving although consumption remains weak due to rising unemployment. No real market impact on statements as Usd/Jpy trades at 95.52, Eur/Jpy 135.20, Aud/Jpy 78.80 and Gbp/Jpy 157.57. |
| Posted: 11 Aug 2009 08:46 PM PDT
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| AUD Wage Cost Index comes out as expected Posted: 11 Aug 2009 06:34 PM PDT The Aussie Wage Cost Index measures the change in the amount that businesses and the government pay for labor (excluding bonuses). This number is important because it indicates consumer inflation due to the fact that when businesses pay more for labor, the higher costs are passed on to the consumer.
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