Forex Market Updates & Commentary

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• Dollar getting stronger against the GBPUSD and EURUSD
• AUDUSD bumping against resistance. Watching commodities
• Aug 27 2009 Forex Market Video
• Feds Lacker comments from speech hit the newswires
• GDP better than expected. Initial Claims a little worse. Cont Claims better
• EURUSD watching upside resistance at the 1.4291 to 1.4295 levels
• Bobbys Corner-Open Market-Aug.27.2009
• German CPI comes out higher than expected
• GBPUSD tests the MA resistance on a quick break higher
• USDJPY loses ground overnight. Takes out August low but bounces
• US GDP Due out at 8:30 along with weekly employment claims data
• CBI realized sales (UK)
• UK Preliminary business investment
• Eurozone M3 money supply & Private Loans
• Eur/Gbp continues upward trend

Dollar getting stronger against the GBPUSD and EURUSD Posted: 27 Aug 2009 07:03 AM PDT The GBPUSD broke through the key 1.6187 level and this is leading to increased selling pressure in the pair. The price is testing the low from yesterday at the 1.6158 level.  The next support level comes in at 1.6124 and then 1.6170. The 100 day MA comes in at the   1.5971 level.   This is a key target as long as the price remains below key resistance. For now watch the 1.6187 level.  Staying below this level is key for a more sustained move lower for the pair. Bias to the downside.

AUDUSD bumping against resistance. Watching commodities Posted: 27 Aug 2009 06:31 AM PDT There was some rumblings in the market last night that China may have some stockpiles of commodities which are overflowing. This could lead to some declines in some of the commodity pairs like the AUDUSD. The pair is currently testing 100 hour MA resistance at the 0.8348 level.  The high for the day reached 0.8355.  A sale against a stop at a new high might be a safe play. The CRB index is down -1.41 in early trade aiwth Aluminum and Nickel leading the decline.  Support in the AUDUSD comes in at 0.8310 initially

Aug 27 2009 Forex Market Video Posted: 27 Aug 2009 06:30 AM PDT Click here to view the embedded video. In depth review of the Forex markets today. Choppy trading, see where the good opportunities are by watching this video.

Feds Lacker comments from speech hit the newswires Posted: 27 Aug 2009 05:44 AM PDT  LACKER SAYS EMERGENCY CREDIT AID TO RUN OFF NATURALLY EMERGENCY CREDIT PROGRAMS PRICED TO EVAPORATE’ RAISING RATES HINGES ON STRENGTH OF RECOVERY FED MAY NOT NEED TO PURCHASE ALL $1.25 TLN IN MBS WE CAN LOOK FORWARD TO BETTER TIMES U.S. ECONOMY APPEARS TO HAVE LEVELED OUT SEES IMPROVEMENT IN TRADE, MANUFACTURING RINFLATION PROBABLY WON’T FALL SIGNIFICANTLY HOUSING, AUTOS NO LONGER A DRAG ON GDP Generally speaking , his comments are more positive and are leading to a move into some risk currencies.  USDJPY, GBPUSD and EURUSD move a bit higher.

GDP better than expected. Initial Claims a little worse. Cont Claims better Posted: 27 Aug 2009 05:36 AM PDT The GDP came in at -1.0%  vs -1.5% expected.  The Consumption came in higher at -1.0% vs -1.3% expected. Government also contributed to the better data.  Inventories plunged by a record amount which keeps the inventory correction theme still in play for Q3.  Initial Claims fell to 570K from 580K but higher than expectation at 565K.  The Continuing Claims fell however to 6133K from 6252K and 6242K expectation. The dollar has gotten a bit bid off the data.  However USDJPY held the 200 bar MA on the 5 minute chart at the 93.83 level. The 100 bar MA at the 93.65 level should provide support, with buyers against the level.  Watch these levels for intraday clues.

EURUSD watching upside resistance at the 1.4291 to 1.4295 levels Posted: 27 Aug 2009 05:30 AM PDT The EURUSD has key resistance above at the 1.4291 to 1.4295 level.  The midpoint of the recent move down from the Aug 21st high to the August 26th low comes in at 1.4291. The 100 hour MA comes in at 1.4295 where it has been going sideways for the last 24 hours.   The two key levels increases the importance of the level today.  I would expect sellers against the level.  On the downside, the 1.4206 to 1.4211 level was key support yesterday and will remain key support today.  Before that level comes the 200 hour MA at the 1.4230 level   This level will be the initial support today off the hourly chart.  The 5 minute chart provide some near term support at the 1.4248 to 1.4253 levels where the 100 and 200 bar MA are located.  Yesterdays closing level was at the 1.4254 level.  This adds to the importance of the moving average levels. However take note that the activity in the EURUSD has been choppy with a semi upward bias. reactions to the numbers have been fairly muted.  Overall, not that the data is out, the activity is slowing. The

Bobbys Corner-Open Market-Aug.27.2009 Posted: 27 Aug 2009 05:29 AM PDT Good Morning: The JPY rose as concerns over Chinese production curbs caused concerns that the economic recovery will slow, fueling demand for the safety of the Yen. The US economy probably shrank at a faster pace than originally reported. The main component of the GDP data today is that businesses made large cuts in their inventories. Asian equity markets were  lower-and Europe is mixed at this time.  US futures are slightly higher this morning. Oil$$71.16                    Gold:$950.20    Today’s data: Q2 GDP revised:        exp: -1.5%                   prior:-1% Jobless Claims:          exp: 565K                   prior: 576K HAVE A GREAT DAY & GOOD LUCK

German CPI comes out higher than expected Posted: 27 Aug 2009 05:28 AM PDT The Month on month showed a +0.2% gain vs expectation of 0.0% gain YoY came in at 0.0% vs expectation of -0.2%.  Although higher, the inflation is not expected to be a concern for the time being even though expectation is for an increase into the year end, as the effects of the July to Dec 2008 declines in prices declines due to lower energy/commodities, fall out of the YoY equation.

GBPUSD tests the MA resistance on a quick break higher Posted: 27 Aug 2009 05:09 AM PDT The GBPUSD has made a quick push higher in early NY trade.  The pair has moved above the 100 bar MA on the 5 minute chart at the 1.6205.  The 200 bar moving average comes in at the 1.6219.  A move above will help confirm the short term break.  Look for support against the 100 bar MA now.  If the level can hold, it would give the intraday longs additional confidence for a push higher   The close from yesterday at the 1.6247 is the next upside target. A move back lower has good support at the 1.6187 level.  This was a key support level yesterday. We did break below the level but once the price moved back above the level the market used it again as support.  Today, the level was used as support, broke through, but moved back higher in the same pattern.  This increases the importance of the level as support going forward.    For now watch the support off the 100 bar MA (1.6205). On the longer term chart the price moved below the trendline support yesterday and should stay below this trendline for the bears to maintain some sort of corrective bearish hope.  The level comes in at the 1.6277 level.  Keep this level in mind. The GBPUSD has been in a consolidative range since June with most activity between 1.6317 and 1.6589. .

USDJPY loses ground overnight. Takes out August low but bounces Posted: 27 Aug 2009 04:57 AM PDT The USDJPY has suffered overnight. There was talk of a change in Japan tax laws that would exempt dividend income from overseas units.  The exemption would encourage companies to repatriate funds back to Japan from overseas like the US to take advantage of the tax benefit. This seemed to be the driving theme to the strength in the JPY (decline of the USDJPY).  From a technical perspective the fall took out the previous low reached on August 21st at the 93.42 - falling to 93.37.  This is the lowest level since July 22nd.  However, the pair quickly reversed and this tends to lead to a move back higher as no momentum, leads to shorts getting scared. The correction has taken the pair up to resistance at the 100 bar MA on the 5 minute chart.  Activity at the resistance level is choppy.  A move back below the 93.57 level could see another leg to the downside.  Until then, expect buyers with a move toward the 94.00 a possible upside target.  Confirmation of the upside comes with a move above the 200 bar MA on the 5 minute chart currently at the  93.85 (green line in the chart below).

US GDP Due out at 8:30 along with weekly employment claims data Posted: 27 Aug 2009 04:34 AM PDT US Preliminary GDP for the 2nd quarter is due out at 8:30 along with the weekly Employment Claim data. The GDP is expected to come in at -1.5%.  This is worse than the -1.0% initially reported.  Consumption is expected to be revised lower to -1.3% from -1.2% initially reported (70% of GDP).  Inventories are expected be the main contributor to the more negative reading as companies slashed even more inventories than previously thought.  Ironically, the worse the number may be better for the overall market sentiment as the expectation would be for an even better 3rd quarter as inventories, housing and stimulative measures like Cash for Clunkers increase GDP for the 3rd quarter.  A drop in the GDP will be the 4th in a row. This is the longest period of contraction since records began in 1947.  The number is Q/Q change and then annualized. The Initial Claims data are also due at 8:30.  The expectations for them is for Initial Claims to fall to 565K from 576K last week. Continuing Claims are expected to stay steady at 6243K (vs 6241k last week).  The market is still looking for signs of employment gains.  However, the data continues be somewhat disappointing as jobs still continue to be

CBI realized sales (UK) Posted: 27 Aug 2009 03:05 AM PDT CBI realized sales came in at -16, weaker than the -12 expected.  This should be a bad number for sterling. Sterling sold off 10 minutes prior to release of this number with Gbp/Usd making new lows around 1.6280 and Eur/Gbp making new highs around .8815.

UK Preliminary business investment Posted: 27 Aug 2009 01:36 AM PDT UK preliminary business investment q/q came in at -10.4%, far weaker than the -3.6% expected and also off from prior -7.6%. Not a good number for sterling as Gbp/Usd is of 20 pips so far, trading down to 1.6203.

Eurozone M3 money supply & Private Loans Posted: 27 Aug 2009 01:03 AM PDT Eurozone M3 money supply came in at 3.0%, weaker than the 3.3% expected and 3.5% prior reading. Private loans y/y came in at 0.6%, weaker than the 1.3% expected and the 1.5% prior reading. Overall weak numbers for the Euro as Eur/Usd off about 10 pips to 1.4235.

Eur/Gbp continues upward trend Posted: 27 Aug 2009 12:06 AM PDT Eur/Gbp has been on an steady upward trend since making a low of .8521 on Aug. 17th. A trendline that I put into place at the end of last week is still holding true to form. The overall weakness of sterling is the main cause for the steep ascent of  Eur/Gbp. After a days worth of consolidation (Aug 20-21) both the 100 and 200 hour M/A have turned upward. Look at this trendline as a guide for direction for a break below may mean a major correction is looming. If fit stays above the trend is likely to continue.

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