Monday, October 5, 2009

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

US September ISM for Non Manufacturing rises to 50.9. Higher than expectations

Posted: 05 Oct 2009 07:04 AM PDT

  •  BACKLOGS INDEX 51.5 AFTER 41.0
  •  PRICES INDEX 48.8 AFTER 63.1
  •  ORDERS INDEX 54.2 AFTER 49.9
  •  INVENTORY INDEX 47.5 AFTER 43.0
  •  EMPLOYMENT INDEX 44.3 AFTER 43.5

This is better than expectations and led to a spike  in the EURUSD  to 1.4624. The price has come down a bit, but the bounce off the 100 hour MA support at the 1.4589 is encouraging for the pair. Look for buyers on dips and furrther gains.

October 5th 2009 FXDD Morning Forex Commentary is available for viewing

Posted: 05 Oct 2009 06:48 AM PDT

$AUDUSD moves higher overnight. Speculation of a rate rise increases

Posted: 05 Oct 2009 06:19 AM PDT

gregmike-05169

The AUDUSD moved higher today. There was speculation in the Sydney Morning Herald that a move back up to 3.25% was likely as a result of stronger labor conditions.  The spike higher in the AUDUSD took the pair back above the 200 hour MA and above the 100 hour MA.  Although the price has been able to maintain its bid above the 200 hour MA, the price has been above and below the 100 hour moving average for most of the day.  The 200 hour MA should continue to provide support at the 0.8717 level.  The 100 hour moving average comes in at the 0.8741.  A move back above this level should lead to some additional buying.

gregmike-05170

Although an interest rate move should not be ignored and should lead to further gains, the question is “Is it priced in?” .  This increases the risk in the market and as a result, traders should lessen positions.   Looking at the longer term chart, the AUDUSD has retraced nearly 75% of the move down from the 2008 high when the interest rate spread between the Australian target and the US target Feds Fund rate was 5.25%.  The current spread is miuch lower at 2.75%.   By this measure a rise to 3.00% between Australian and US rates implies that the AUDUSD is too high relative to the value at the peak. However, it seems the US is not ready to tighten given the US employment report on Friday. In addition if the RBA does tighten, it is likely not the last tightening.  This will lead to an increased intererst rate spread which favors dip buying in the AUDUSD. 

So although there may be a “buy the rumor, sell the fact” move, dips will likely be purchased as expectation of future rate increases are likely. 

Of course if the RBA does not raise rates, the market is likely to be disappointed and a move lower should be the initial reaction at least.  Once again, risk increases. Be on alert. 

The decision will take place tonight at 11:30 PM NYT.

greg_michalowski_fxdd_fxtrading02006

EURUSD moving toward support at 1.4589. Keep level in mind

Posted: 05 Oct 2009 05:39 AM PDT

gregmike-05168

Support is at the 1.4589 level in early trade. Below that the 1.4570 level (close from Friday will be watched for further bearish confirmation.

USDJPY move up a touch on Fujii comments. Stays contained by the 100 (89.73) and 200 hour MA (90.05)

Posted: 05 Oct 2009 05:20 AM PDT

gregmike-05166

The new Finance Minister Fujii commented over the weekend that “appropriate steps” will be taken if necessary to curb the yen’s recent strength.  This helped give the USDJPY a little bid in todays trading but the pairs upside is still limited. The low for the trading day has come in at the 89.34.  The high has extended up to the 89.97.  The close last Friday came in at the 89.74 level. 

The price has traded within the 100 hour and 200 hour moving average for the most part (one bar closed below the level) for the last 13 trading hours.  The 200 hour MA comes in at the 90.05 level currently. The 100 hour MA (blue line) comes in at the 89.73 level. 

The 100 hour MA has been moving sideways late on the day on last Thursday. This has allowed the 200 hour MA to catch up to the market.  When the price and MA converge, this indicates a non trend market.  Often a move in one direction or the other will materialize.  We will be watching for a break.  A break of MA should signal the the directional bias.   

A break on the topside should target the 90.38 level which is the midpoint of the move down from the Sept 21 high to the low on Sept 28th. 

On the downside, a break below the 89.73 level would 89.35 next which is a level of support over the last few trading days (see chart below).

gregmike-05167

GBPUSD stays above Friday’s closing level. Watching 1.5959/64 in early NY trade.

Posted: 05 Oct 2009 05:00 AM PDT

gregmike-05164

The GBPUSD closed Friday at 1.5911.  The low reached 1.5919. The high extended to 1.6023.  At the top, the pair tested the 200 hour MA at the 1.6030 level, but found sellers against the key level (200 hour MA - green line - is now at the 1.6019 level).  The price is now back below the 100 hour MA which currently comes in at the 1.5959 level.  Look of sellers against this level in early NY trade. There is also resistance off the shorter term 5 minute chart at the 1.5964 area where the 100, 200 and 50% retracement is found.   A move above this area reverses the bearish bias.  On the downside,  the target would be the 1.5911  - the close from Friday.

gregmike-05165

G7 fails to ignite the dollar. EURUSD stays within 100 and 200 hour MA for most of day.

Posted: 05 Oct 2009 04:43 AM PDT

gregmike-05163

Despite some efforts by officials at the G7, the dollar failed to rise after the g7 meeting this weekend. 

The EURUSD is actually higher - closing last week at the 1.4570 level. The  high today reached 1.4655.  The low today has been 1.4580.  The pair tested the 200 hour moving average (green line in the chart above), and broke through. However, the market could not close the hourly bar above the level and the price has settled below the moving average (currently at the 1.4639 level).  This level will be resistance for the pair this morning. ON the downside, the 100 hour MA at the 1.4589 level should provide some initial support.  A break of either “goal post” (100 hour MA or 200 hour MA) should solicit additional momentum in the direction of the break.  Look for some interim selling against the 100 bar MA on the 5 minute chart at the 1.4628 level (currently).

gregmike-05162

Eurozone Retail Sales

Posted: 05 Oct 2009 02:03 AM PDT

Eurozone Retail Sales m/m came at -0.2%, stronger than the -0.5% expected. Y/y came in at -2.6%, weaker than the -2.4% expected.

Mixed readings for the Euro as we see a slight bump in Eur/Usd, up about 7 pips to 1.4623.

UK Services PMI

Posted: 05 Oct 2009 01:32 AM PDT

Services PMI in the UK for September was 55.3; better than its forecast of 54.6 and August reading of 54.1. The EUR caught a light bid on the release.

Sentix Investor Confidence

Posted: 05 Oct 2009 01:31 AM PDT

The Euro-Zone’s Sentix Investor Confidence came in at -12.6, slightly worse than its forecast of -12 and prior reading of -14.6. The market showed a limited reaction to this release.

Sterling/Yen trading near 100 hour M/A

Posted: 05 Oct 2009 01:18 AM PDT

Gbp/Jpy has been trading near its 100 hour M/A. A break below could see the pair trade down to 142.55 which is the 50% Fibo support level. A break above could bring the pair back up to session highs around 143.90. With UK PMI coming out in next 10 minutes the pair could become volatile and break either to upside or downside depending on figure.

vincent_fx00015

Euro-Zone PMI

Posted: 05 Oct 2009 01:01 AM PDT

PMI in the Euro-Zone for September came in slightly better than expected causing the EURO to catch a slight bid on the release. The details are as follows:

  • PMI Services (Italy) - Survey: 47.2   Actual: 48.5   Prior: 46.4
  • PMI Services (France) - Survey: 52.2   Actual: 53.2   Prior: 52.2
  • PMI Services (Germany) - Survey: 52.2   Actual: 52.4   Prior: 52.2
  • PMI Services (Euro-Zone) - Survey: 50.6   Actual: 50.9   Prior: 50.6
  • PMI Composite (Euro-Zone) - Survey: 50.9   Actual: 51.1   Prior: 50.8

Eur/Usd flirting with 200 hour M/A

Posted: 04 Oct 2009 10:08 PM PDT

Eur/Usd has been trading near its 200 hour M/A (1.4645) for last couple of hours. It seems to be acting as a good source of resistance. Earlier in session the pair broke above its 100 hour M/A (1.4589) and then made its move up to current levels. If the 200 hour M/A holds look for the pair to trade back down to 1.4585-90 or its 100 hour M/A. A break above can see Euro trade up to 1.4675-80 coinciding with some old hourly highs. Upon the upcoming European it will be interesting to see what direction the pair will take.

vincent_fx00014

10-5 Economic Calendar

Posted: 04 Oct 2009 08:23 PM PDT

region_forex_00010

ANZ Commodity Price Index

Posted: 04 Oct 2009 07:28 PM PDT

The NZD ANZ Commodity Price Index came in higher in September at 6.8% after a 4.3% reading the prior month. The commodity and risk pairs have continued to move higher with energy prices, gold and equities.

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