Forex Market Updates & Commentary

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• US Business Inventories fall -1.5%. Stockpiles at lowest level since Sept 2008
• $GBPUSD tests then moves below the 200 bar MA at 1.5955. Key resistance now. Support at 1.5922.
• $USDJPY drops through support at 89.44. Look for resistance against the level now.
• Oct 14 2009 Forex Market Update
• $GBPUSD using 100 bar MA on 5 minute chart as support. Level at 1.5975 currently
• Retail Sales fall less than expected but revision lower. Most components outside autos gained
• USDCHF moves back to the 1.0188 key level. Key level for the pair to watch.
• Bobbys Corner-Open Market-Oct.14.2009
• EURUSD moves higher but comes off. Stronger stocks help some. 1.4973 and 1.4960 eyed as support.
• US Mortgage Applications fall 1.8% for the latest week
• Eurozone Industrial Production as expected
• UK Unemployment Data
• Eur/Gbp finds some support
• 10-14 Economic Calendar
• Japan’s Inflation Report

US Business Inventories fall -1.5%. Stockpiles at lowest level since Sept 2008 Posted: 14 Oct 2009 07:08 AM PDT This was more than expected.  With sales increasing by 1%, the Inventory to Sales ratio fell to 1.33 months.  This is the lowest level since September 2008.  The low level suggests that businesses will likely look to replenish inventories going forward. However, there is a chance that they may also be cautious about the prospects of sales and are choosing to keep stocks low.  Time will tell and it will also help dictate growth going forward. Most economists are expecting a replenishment of inventories to help propel growth going forward. However, the level is getting back down to normal levels that prevailed from 2006 to 2008 and in fact can shrink further.  SO although the move down from the peak is a big sigh of relief (largely through discounting and things like cash for clunkers), the inventory replenishment idea is still built on the back of demand picking up.  This is not guaranteed.

$GBPUSD tests then moves below the 200 bar MA at 1.5955. Key resistance now. Support at 1.5922. Posted: 14 Oct 2009 06:50 AM PDT As per prior post, the GBPUSD has moved below the 100 bar MA  found support against the 200 bar MA at the 1.5955 level, but has since broken to the downside.  This level is a key level for the pair this morning and will now be a resistance level for the pair.    The market will next target the close from yesterday at 1.5922, then 1.5902 which is the 38.2% retracement of the move up from yesterdays low.  The 200 bar MA is upside resistance now.  With the 100 bar MA at the 1.5979 level being another upside resistance level.

$USDJPY drops through support at 89.44. Look for resistance against the level now. Posted: 14 Oct 2009 06:42 AM PDT The USDJPY dropped through support at the 89.44 level and plunged to a low of 89.05. The USDJPY is trading in a rather choppy fashion today with a spike higher and now a plunge lower in the last few hours of trade. This makes me less inclined to trade the pair as the risk is increased.  Look for resistance now at the 89.44 level (low from yesterday and 38.2% retracement level of the weeks range).  If the level is broken back to the upside,  I would expect stops.   Keeping risk to ta minimum seems to be the wise choice for the pair today.

Oct 14 2009 Forex Market Update Posted: 14 Oct 2009 06:34 AM PDT Click here to view the embedded video. The dollar has moved lower again today as higher stocks continue the good news is bad news for the dollar. The dollar reached new lows versus the EURUSD and USDCHF in particular. The GBPUSD has also trended higher while the USDJPY remains mixed.

$GBPUSD using 100 bar MA on 5 minute chart as support. Level at 1.5975 currently Posted: 14 Oct 2009 05:48 AM PDT The GBPUSD has been using the 100 bar MA on the 5 minute chart as the level of support today. Although there were a couple of dips below, the mometum below the line was modest and the price rebounds negated the breaks (if the price move below the moving average, the price should decline. It did not).  The current 100 bar MA comes in at the  1.5976 level.  A would expect that buyers would come in against the level on dips.  A break below should be sold with a move below the 200 bar MA as confirmation of further downside pressure.  On the topside, the price action above the 1.6000 level today reached highs of 1.6023, 1.6014 and 1.6020 respectively (highs in 5 mnute chart above).  These levels will likely solicit the traditional selling from a shorter term intraday traders.   A move above the high would next target 1.6046 level which is the high from October 6th.  The high price reached last week extended to 1.6118.  The GBPUSD remains range bound with 1.6120 containing the topside and 1.5740 the rough low for the range.  Look for rallies to be sold and dips toward the bottoms to be bought. In between following the shorter term charts (like the 5 minute chart) and looking for trend type moves on a shorter term basis is the best course of action.

Retail Sales fall less than expected but revision lower. Most components outside autos gained Posted: 14 Oct 2009 05:34 AM PDT The Ex Auto came in better at +0.5% vs expectation of +0.2%.  Last month the ex Auto came in at +1.0% vs original estimate of +1.1%.  The headline number came in at -1.5% vs expectation of -2.1%. However, the revision was down from +2.7% to +2.2%.  Despite the decline, most categories were up MoM Retail sales                         -1.5%   vs 2.2%  Ex-autos                             0.5% vs  1.0%  Ex-food                             -1.7%   vs 2.4% Components Vehicles & parts          -10.4% vs  7.8%  Auto dealers                    -11.8%   vs 8.8% Furniture, home              1.4% vs -0.8% Electronics stores           0.0% vs  0.5%   Building materials        -0.2%  vs -1.2% Food & Beverage             0.7%  vs  0.8%   Grocery stores                 0.9% vs   0.6%     Health stores                     0.8%   vs 0.5%   Gasoline stations              1.1%  vs  4.7%  Clothing stores                  0.5%   vs 1.1%     Sporting and book          0.1% vs  1.8%  General Merchandise     0.9%  vs  1.2%   Dept stores                         0.4% vs   1.1%    Miscellaneous                 -1.9%  vs 0.9%  bold are negative.

USDCHF moves back to the 1.0188 key level. Key level for the pair to watch. Posted: 14 Oct 2009 05:29 AM PDT The USDCHF moved below the 1.0188 level  today on its way to new lows at 1.0165.  The 1.0188 level was the low price for 2009 reached on September 23rd.  The next low target for the USDCHF is the 1.0136 level which is the low price going back to July 22nd 2008.  There are other low values at that area that occurred during July 2008. I would expect buyers against this key technical support level going forward. On the topside, the 1.0188 level is a key level.  Not only is it the old low price from Sept 23rd, it is also where the 100bar MA on the 5 minute chart is found.  A  move above should be short term bullish.  The upside would be confirmed via a move above the 200 bar MA at the 1.0200 level .

Bobbys Corner-Open Market-Oct.14.2009 Posted: 14 Oct 2009 05:27 AM PDT Good Morning: The USD continued to drop overnight. Comments from Fed Vice Chairman Kohn that interest rates will remain low for an “extended period”  helped move the EUR/USD pair to a high of 1.4920.  This is the weakest the greenback has been since Aug. 2008. Equities rose around the world, except the Nikkei which was slightly lower overnight.  US Futures are pointing to a higher opening this morning. Oil rallied, and Gold traded in the $1060/oz range. Oil:$74.74                      Gold:$1059.20 Today’s data: Retail Sales:         exp: -2.1%      prior: 2.7% Bus Inv:                 exp; -1%         prior: .6% Mins of Sept. 23 FOMC Meeting  due out at 2 PM     HAVE A GREAT DAY & GOOD LUCK

EURUSD moves higher but comes off. Stronger stocks help some. 1.4973 and 1.4960 eyed as support. Posted: 14 Oct 2009 05:01 AM PDT The Intel and JP Morgan earnings were better and it has the stock market up 114 points.  The good news is bad news for the dollar has pushed the EURUSD up over the 1.4900 level for the first time since August 22nd 2008 when the high reached 1.4908.  The high price reached 1.4920.  There is  trendline resistance off the recent highs come in at the 1.4932 level today.  We will use all this level as target resistance level. Other levels include 1.4950, 1.4964 and 1.4980. These are old high values from August 2008.   Needless to say, the market is looking for a highs on each successive move. However, the dips are shallow and the price keeps marching higher. On the downside, the price just dipped below the 100 bar MA at the 1.4890 level. The market has been using the level as support for the day. This may suggest the top is in place after the trend type move today so far.  Using the 100 bar MA as the bullish or bearish bias line is a good strategy.   Look for support at the  1.4873 where the 200 bar MA on the 5 minute chart is found.  Additional support will come in against 1.4860 and 1.4844 which was the old high from 2009 before the move above yesterday.

US Mortgage Applications fall 1.8% for the latest week Posted: 14 Oct 2009 04:35 AM PDT The US Mortgage Applications fell by 1.8% for the current week.  This was on the back of a large 16.4% gain last week.  The components in the report showed that the Purchase index fell by -5% vs a gain of 13.2% last week. The Refinance Index fell by -0.1% vs a gain of 18.2% last week.  The  average rate rose to 5.02% from 4.88% last week.  Although down, the fall is from the highest level in 4 months.  Later this morning the Retail Sales will be released for the month of September. The expectation is for a decline of -2.1% vs a gain of 2.7% last month. The Less Auto release is expected to show a gain of 0.2% vs a larger than expected gain of 1.1%.  The number is expected to be effected by the cash for clunkers program which inflated last months number but will subtract from this months headline number.  Also due for release at 8:30 will be the Import Price Index for September.  This number is expected to show a MoM gain of 0.2% with the YoY rising to -11.4% from -15.0% last month.  This series is still working through the large declines from 2008 when in Sept, October, November and December the MoM declines were -3.6%, -6%, -7.4% and -16.9% respectively. The falling out of those values will show that the dollar decline and higher oil is raising the import prices by a fairly healthy rate of greater than 8%.  Although, there are counter deflationay effects, if that inflation should slow, the inflation worries will resurface.  That is down the road however.

Eurozone Industrial Production as expected Posted: 14 Oct 2009 02:02 AM PDT Eurozone Industrial Production m/m came in as expected at 0.9%. Eur/Usd currently trading at high of 1.4905.

UK Unemployment Data Posted: 14 Oct 2009 01:34 AM PDT UK Claimant Change Count came in at 20,800. better than the 24,500 expected. UK  Average Earnings Index 3m/y came in at 1.6%, stronger than the 1.4% expected. UK Unemployment Rate came in at 7.9%, stronger than the 8.0% expected. Strong numbers for the Pound and market activity shows it as Gbp/Usd has risen 50 pips to 1.5988 thus far on news. Eur/Gbp has found new lows trading at .9305.

Eur/Gbp finds some support Posted: 13 Oct 2009 10:15 PM PDT Eur/Gbp sold off quite a bit during U.S. session on some encouraging comments from BOE Deputy Governor Charlie Bean. The pair is off about 85 pips from highs made during yesterday’s European session (.9411). The 38.2% Fibo retracement, using .9158 low from Oct. 8th, lies at .9314. Eur/Gbp has bounced off this level 3 times in the last day of trading. If this level holds look for the pair to bounce to the .9355-60 level. A break below could bring the pair down to .9283 or its 100 hour M/A, with added support at 50% Fibo of .9284. The former is more likely, but the market will have the last say for sure.

10-14 Economic Calendar Posted: 13 Oct 2009 09:21 PM PDT

Japan’s Inflation Report Posted: 13 Oct 2009 04:58 PM PDT Japan’s Domestic CGPI reading for September, came in as expected to little market reaction. The release was as follows: Domestic CGPI (MoM) - Survey:0.1% Actual:0.1% Prior:0.0% Domestic CGPI (YoY) - Survey:-7.9% Actual:-7.9% Prior:-8.5%

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