Forex Market Updates & Commentary

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• EURGBP gets hit hard today. Tests the 50% midpoint retracement level
• August 19th 2009 FXDD Morning Forex Commentary
• USDJPY tests the 100 hour moving average and moves lower overnight
• PPI and US Housing Starts and Building Permits lower than expected
• Bobbys Corner-Open Market-Aug.18.2009
• GBPUSD tests the 100 hour MA today and backs off. Still up smartly.
• EURUSD rebounds today, but comes off the highs. Watching 1.4120 area.
• Overnight stocks, economic data lift the risk appetite again
• Usd/Jpy holds above 95.00
• Gbp/Jpy touches 100 hour M/A
• German ZEW survey stronger than expected
• UK CPI & RPI figures stronger
• Usd/Jpy trying to get above 95.00
• 8-18 Economic Calendar
• RBA August Meeting Minutes

EURGBP gets hit hard today. Tests the 50% midpoint retracement level Posted: 18 Aug 2009 07:02 AM PDT The EURUSD is under some pressure. The GBPUSD is bouncing off support.  The combination means the EURGBP is falling..  The pair has moved below the 100 and 200 hour moving averages at the 0.8609 and 0.8579 levels and now approaches the midpoint of the last move higher. That level comes in at the 0.8553 level and should provide some support.  Look for buyers/profit takers against the level with stops on a break below.

August 19th 2009 FXDD Morning Forex Commentary Posted: 18 Aug 2009 06:30 AM PDT Click here to view the embedded video.

USDJPY tests the 100 hour moving average and moves lower overnight Posted: 18 Aug 2009 05:48 AM PDT The USDJPY moved higher overnight on more favorable risk appetite, but held the 100 hour MA at the 95.20 level (see early post by clicking here) and has continued to come off after the worse than expected US data at 8:30 AM.  The price is also back below the 200 day MA at the 95.00 level.  This level will be of more importance on the close today but should also provide upside resistance intraday. On the downside, the pair is still up on the day and has the closing level at the 94.51 to shoot for as the next target level to the downside.   Look for buyers against this level at least initially.   Stocks will be an influence today as the market is focused on the risk trade as defined by how equities react. The bearishness from yesterday has been softened by the gains overseas, but the equities may have more correction to go.

PPI and US Housing Starts and Building Permits lower than expected Posted: 18 Aug 2009 05:32 AM PDT Housing Starts fall to 581K from 587K Building Permits came in at 560K versus 570K US PPI MoM came in much lower at -0.9% vs -0.3% expected and 1.8% gain last month Ex Food and Energy  -0.1% vs +0.1% expected and +0.5% last month YoY came in lower at -6.8% vs -5.9% expected and down from -4.6% last month Ex Food and Energy +2.6% vs 2.8% expected. Stocks fell on the news and the intial reaction in the currency markets has been a reversal of the trends seen today with EURUSD, GBPUSD and USDJPY moving lower.  However, there has been a bounce back off the lows.  Watching 1.6413 in the GBPUSD and the 1.4082 level (close from yesterday on the EURUSD).

Bobbys Corner-Open Market-Aug.18.2009 Posted: 18 Aug 2009 05:17 AM PDT Good Morning: The Euro gained overnight as German investor confidence surged to the highest level in 3 years.  The market looks at this data as another sign that the worldwide recovery is starting to take hold.   Worldwide equity markets and metals rose on the heels of this morning’s German investor confidence data. This morning’s US housing starts data is expected to rise, and this speculation also added to the equity and commodity markets rally overnight. Oil:$67.40                          Gold:$937.50 Today’s data: PPI:                                exp: -.3%                    prior: 1.8% Housing Starts:         exp:  598K                 prior: 582K Build Permits:           exp:  575K                 prior: 563K HAVE A GREAT DAY & GOOD LUCK

GBPUSD tests the 100 hour MA today and backs off. Still up smartly. Posted: 18 Aug 2009 05:16 AM PDT The GBPUSD tested the 100 hour moving average today at the 1.6475 level.  The high extended to 1.6478 but could not muster any momentum above the key moving average level and the market reversed.  The move from the key resistance level has taken the pair back down to the 1.6444.  The pair is up smartly from the close at the 1.6340 level.  CPI data was better than expected today which ran counter to the BOE assessment that inflation would continue to be depressed.    This helped the pair move higher. Support on the downside comes in at the 1.6412 to 1.6414 level (old high and corrective lows) . The 100 bar MA on the 5 minute chart is also moving up toward that level (see 1, 2 and 3 in the 5 minute chart above)..  Below that at the 1.6400 level which is the 38.2% of the move up from yesterday’s lows should contain the downside.

EURUSD rebounds today, but comes off the highs. Watching 1.4120 area. Posted: 18 Aug 2009 04:56 AM PDT The more favorable stock market and better than expected ZEW data lifted the EURUSD today.  However, comments from ZEW officials downplaying the gains also hurt the EURUSD and the price came off from the highs at the 1.4154 level.  The price  is still higher on the day.  The close yesterday came in at the 1.4082.  This level will be a levelof support today.  On the topside, I will be watching the 1.4120 area .   This is the neckline on the head and shoulder formation on the 4 hour chart.   The move back above the line is a worry today.   However,if the trend to the downside can be reestablished the market will likely be appeased. On the shorter term intraday chart there is trendine and 200 bar moving average support that comes in at the 1.4105 level.  The market just dipped below this level but the market is still not sure of the directional change pre data and stock market open it seems.  Keep on eye on the level.  The next support will be the close for the day at the 1.4082 level.

Overnight stocks, economic data lift the risk appetite again Posted: 18 Aug 2009 04:27 AM PDT The Asian equity markets rebounded and so did the risk appetite of the market.  The Shanghai composite rose by 1.4%(+40.25).  The Hang Seng index rose 0.84% (+168.62).  The European indices are also up as are the DJ Futures (+51) and Nasdaq are up 11 in pre-open trading.  The German ZEW index out of Europe came out much stronger than expected at 56.1 vs expectations of 45.0.   However, ZEW officials came out and played down the results saying that the German economy would only rise gradually. In the UK they had stronger CPI data which helped lift the pound back higher. Today the US will release the PPI data for the month of July. The expectation is for a decline of -0.3%  Month on Month for the headline and -5.9% for the Year on Year measure.  Ex food and energy the expectation is for a gain of 0.1% MoM and for the Year on Year to fall by 2.8% from 3.3% last month.    Housing Starts for July will also be released at 8:30.  The expectation is for a gain to 599K from 582K last month.  Permits are likely to rise also to 577K from 563K. Better than expected data is likely to lift equities which should continue the trends for the day.  However, the market may be looking for the gain to take some profits in the equities.  So watch the techinical levels for the currencies.  They will continue to show the way.

Usd/Jpy holds above 95.00 Posted: 18 Aug 2009 02:38 AM PDT Usd/Jpy has held above 95.00, a level that we referenced earlier, and is facing good resistance in the area of its 100 hour M/A (95.20). High thus far has been 95.28, though we cannot state a bullish break of this level yet. If the resistance holds the pair may consolidate into a 95.00-95.20 range. A break above sees the next resistance level at 95.73 (200 hour M/A & 61.8% Fibo).

Gbp/Jpy touches 100 hour M/A Posted: 18 Aug 2009 02:28 AM PDT On the heels of strong CPI and RPI figures out of the UK Gbp/Jpy ran up nearly 80 pips to touch its 100 hour M/A (156.86) and has since retraced 40 pips after facing this resistance. It will be interesting to see if the pair builds again can build momentum and try to bust through this level. Support lies at a trendline around 155.90.

German ZEW survey stronger than expected Posted: 18 Aug 2009 02:06 AM PDT German ZEW survey came in at 56.4, stronger than the 45.0 expected. Current situation came in at -77.2, better than the -85.0  expected. Strong numbers for the Euro as Eur/Usd made new highs up to 1.4154. Some cautious comments from ZEW’s Franz as he sees no reason euphoria, German economy only to recover gradually. German recovery to parallel world economy.

UK CPI & RPI figures stronger Posted: 18 Aug 2009 01:38 AM PDT UK CPI m/m came in at 0.0%, stronger than the -0.3% expected. Y/y came in at 1.8%, stronger than the 1.5% expected. UK RPI m/m came in at 0.0%, stronger than the -0.2% expected. Y/y came in at -1.4%, stronger than the -1.7% expected. Strong numbers for the GBP as it is trading stronger across the board. Gbp/Usd up 40 pips to 1.6340, Gbp/Jpy also up 40 pips to 156.45, and Eur/Gbp off about 20 pips to .8592.

Usd/Jpy trying to get above 95.00 Posted: 17 Aug 2009 09:52 PM PDT Since falling below 95.00 on Aug. 14th Usd/Jpy has been in a pretty tight trading range (low being 94.19). The pair has attempted to break above 95.00 twice thus far and a third attempt appears to be inevitable. If it does break above 95.00 look for the pair to test its 100 hour M/A (95.23). A failed break would lead to more range type trading with 94.42 adding some support.

8-18 Economic Calendar Posted: 17 Aug 2009 08:20 PM PDT

RBA August Meeting Minutes Posted: 17 Aug 2009 06:45 PM PDT The following are the RBA’s August Meeting Minutes highlights, where the RBA kept rates unchanged at 3.00%: Australian domestic demand stronger than expected, risks diminishing demand if it raises rates too early. Less expansionary policy is needed as GDP expands. Risk of further large global slump has diminished. Australian economic outlook has improved. Keeping rates low for too long is a risk to core CPI. Unlikely that further rate cuts will be necessary. Current policy consistent with growth, low inflation. Business investment to fall significantly in 2009-10. Job losses less than expected. First-buyer demand, low rates pushing up home prices. Retail sales in July may be weaker. Global economy has improved, mostly in China. This release helped push the risk pairs, already bid in the session, to new highs including AUD/JPY, which has been the big winner on the session. Since then the JPY has regained some momentum off its lows.

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