Forex Market Updates & Commentary

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• US Existing Home sales rise higher than expected
• Nov 23th 2009 Forex Market Update
• $GBPUSD moves higher with lower dollar. Tough resistance at the 1.6668-71 level approaches.
• ECB Trichet speaking on newswires. Reiterates comments made over the weekend
• Canada Retail Sales better than expectations. USDCAD moves lower but holds the double bottom.
• $EURUSD boosted today by differing quantitative easing opinions and Gold
• Bobbys Corner-Open Market-Nov.23.2009
• Canada Retail Sales and US Existing Home Sales due this morning
• Eurozone PMI
• Eur/Usd finds resistance at Nov 18 high (1.4992)
• Sterling trading at 61.8% Fibo
• Usd/Jpy trades below Nov. 19 low (88.62)
• Gbp/Usd has started retracing Friday’s slide
• 11-23 Economic Calendar

US Existing Home sales rise higher than expected Posted: 23 Nov 2009 07:04 AM PST The US Existing Home Sales rose to an annualized sales rate of 6.1 million units. This is the highest sales pace since February 2007.  The months supply fell to 7 months which is the lowest months supply since also February 2007.  Last month the month supply was at 8.0 months.  The high reached 11.3 months.  A normal market is around 5-6 months.  The Median Sales Price fell to $173,100. The gain was a 10.1% gain from last month.   Lower prices and the $8000 incentive was cited as the reason for the increase.  The report is positive. However, the market continues to be supported by the selling of foreclosed or distressed properties which accounted for 30% of all sales.

Nov 23th 2009 Forex Market Update Posted: 23 Nov 2009 06:45 AM PST Click here to view the embedded video. Sign up early and secure your spot. FXDD’s Next Online Training will be on Tuesday Nov 24th 2009 4PM - REGISTER HERE

$GBPUSD moves higher with lower dollar. Tough resistance at the 1.6668-71 level approaches. Posted: 23 Nov 2009 06:36 AM PST The GBPUSD has moved sharply higher with the lower dollar today. The price is approaching a key resistance level however at the intersection of the 100 and 200 hour MA and the 50% Retracements of last weeks sharp decline. That resistance level comes at the 1.6668 to 1.6671 level.  This level is the next target for the pair and should provide good resistance/profit taking sellers as the level is approached, with stops on breaks above the key level.  On the downside, the 1.6600 level continues to be a level the market is interested in following.  The 38.2% retracement level of 1.6618 will also be a level to watch for support today. Looking at the shorter term 5 minute chart, the 100 bar MA (blue line in the chart below) is currently at the 1.6601 level and gives another reason for support on dips below. The price originally moved up strongly after using the 100 bar MA as a springboard on the downside in Far East trading.  The moving average has followed the trend move higher. A break of it, would be a signal the trend is consolidating and/or possibly reversing.

ECB Trichet speaking on newswires. Reiterates comments made over the weekend Posted: 23 Nov 2009 06:00 AM PST He comments that the ECB will continue to deliver price stability.  That the crisis has debilitated the real econonomy but there are signs of stabilization. He notes that the ECB will phase out the non standard measures slowly (this reiterates comments this weekend) but comments that ECB rates are currently appropriate. The EURUSD has moved up slightly on the comments but resistance at the 1.5000 level remains.  From a technical perspective the price has moved back away from the 100 bar MA on the 5 minute chart at the 1.4966 level currently. This is bullish for the pair intraday.

Canada Retail Sales better than expectations. USDCAD moves lower but holds the double bottom. Posted: 23 Nov 2009 05:44 AM PST The Canada Retail Sales were much better than expectations as it rose by 1.0% and +1.1% ex Autos versus expecations of +0.6% and +0.4% respectively.  Moreover, the prior months were revised higher to +1.0% and +0.7%.  The better data has led to a lower USDCAD (higher CAD$).  However, the lows for the day have held (double bottom at 1.0558).  Just prior to the release the price spiked higher but reversed. The pair should continue to be pressured with the combination of a weaker dollar and strong economic fundamentals from Canada.  Confirmation of the downside would come from a breaking of the double bottom at the 1.0558 level (see chart below).  On the topside, the bearish bias shifts if the price moves above the 100 hour moving average at the 1.0595 level (see blue line in the chart above).  In addition the 100 bar MA on the 5 minute chart is moving down toward this level which makes the level a key level for the bears. As a result, we should see sellers against this level on rallies.

$EURUSD boosted today by differing quantitative easing opinions and Gold Posted: 23 Nov 2009 05:29 AM PST Jean Claude Trichet announced over the weekend that the ECB is lightly tightening the eligibility criteria of the Asset Backed Securities it will accept as collateral at liquidity tenders next year.  This is a step toward unwinding the emergency policies it initiated in response to the financial crisis.  Meanwhile, the St Louis Fed President Bullard was on the wires say he favored extending the Feds Mortgage Backed Securities buying program.  Bullard is currently not a voting member on the FOMC but will be one starting in January. The combination of one decreasing (ECB) and one increasing (the Fed) sent the dollar lower against the EURO.   Sharply higher Gold is also benefitting the trend today (up $16 to a new record price). From a technical perspective, the price moved back toward the 1.5000 level, stopping at the 1.4990 level.  This was the same high reached last Wednesday.  The high from last week reached 1.5015 on Monday, but that spike higher was short lived. Last week, the price moved up and down with activity centered around a low around 1.4800 and a high at 1.5000.  The pair is contained by these two extremes.  The trading activity lends itself nicely to range trading as intraday, the pair had nice trend type moves.  Trading a trend longer than that has not panned out. As a result, paying attention to the 5 minute chart and the key moving averages has been the way to go. Looking at that chart, the price today consolidated in early Far East Trading, but after reaching a bottom of 1.4832, the upswing ensued. The price moved in between the 100 and 200 bar MA for an hour or so, and then broke higher.  The gains were pretty steady to the upside until the price reached the upside target from last weeks highs.  The pair has consolidated for the last 5-6 hours and now looks to test the 100 bar MA once again at the 1.4963 level.  The market is at a crossroad.  Does it look to extend higher using the moving average as a springboard higher, or does it correct lower toward the 1.4929 level where the 200 bar and the 38.2% retracement level is currently located (the 200 bar MA is rising so be aware of the moving support target).

Bobbys Corner-Open Market-Nov.23.2009 Posted: 23 Nov 2009 05:19 AM PST Good Morning: The USD and JPY are weaker this morning as  indications continue that worldwide central banks will keep interest rates low to help spur global economies, as the worst recession since World War 2 retreats.  Statements from various Fed Presidents have indicated that interest rates will stay low until 2010-2011.  This will keep the USD under pressure for the immediate future.  World equity markets rose.  US Futures are alos higher this morning. Gold reached another record overnight ($1067.88), and Copper reached a 14 month high. Oil:$78.46                            Gold:$1064.20 Today’s Data: Existing Home Sales:      exp: 5.7M          prior: 5.57M HAVAE A GREAT DAY & GOOD LUCK

Canada Retail Sales and US Existing Home Sales due this morning Posted: 23 Nov 2009 04:51 AM PST   As we enter the US Thanksgiving Day week (on Thursday), the economic calendar will start with the Canadian Retail Sales report which will be released at 8:30 AM.  The expectation is for a gain of 0.6% with Ex Auto sales coming in at +0.4%.  The Canadian Retail Sales have been improving 2009 as the global economy improves.  Gas station sales have helped the sales over the last 3 months with a 21.8% annualized gain.  However, over the same time period strong gains in pharmacy sales (+13%), Building Supplies (+3.9%) and Furniture and electronics (+3.1%) have also led to gains in ex auto sales increases in 3 of the last 4 months. At 10:00 AM this morning, the US Existing Home Sales for the month of October will be released. The expectation is for the annualized sales pace to rise to 5.7 million units. This is up from the 5.57 million pace last month and would represent a 2.3% MoM gain.  Be careful in interpreting the MoM % gain as there is usually a revision to the prior month that can skew the figures.  So watch the annualized rate to gauge the strength or weakness of the report.  A sales pace of 5.7 million would be the highest since July 2007.  The 1st time homeowners rebate program is helping sales - especially in the low price range.  Also released with the annualized sales pace is the months supply of homes on the market.  Last month, the supply of homes fell sharply to 7.8 months which is the lowest supply since March of 2007.  A movement lower would be good news for the housing market.  Watch this number. There is no estimate for this figure.

Eurozone PMI Posted: 23 Nov 2009 01:33 AM PST Eurozone Flash Manufacturing PMI came in at 51.0, slightly weaker than the 51.3 expected but stronger than the 50.7 prior reading. Earlier French Man. PMI fell short of estimates by 1.3 and German Man. PMI beat estimates by 0.4 thus the market was expecting a relatively flat reading. Eurozone Flash Services PMI came in at 53.2, stronger than the 52.7 expected and 52.6 prior reading. Earlier French Services PMI beat estimates by 2.7 and German beat the number by 0.5 so a positive reading was expected. Not much market reaction to figures as Eur/Usd has begun to pullback from earlier highs, now trading at 1.4975.

Eur/Usd finds resistance at Nov 18 high (1.4992) Posted: 23 Nov 2009 12:57 AM PST Eur/Usd has run up some 160 points from Sunday’s opening and currently is making a push towards 1.5000. The session high has been 1.4990 thus far and my guess is this may be a level of resistance coinciding with Nov. 18 highs. A break above should bring pair to 1.5015-20 level. If it holds look for a pullback to 1.4945-50 level.

Sterling trading at 61.8% Fibo Posted: 23 Nov 2009 12:37 AM PST Sterling is trading at the 61.8% Fibo of Friday’s high of 1.6674. Gbp/Usd is firming up as session moves on and the retracement that we soke of in previous post has been varified by the market. A clean break above 1.6592 should lead the pair up to short term resistance at 1.6634. If the 61.8% Fibo holds a pullback to 1.6567 is likely.

Usd/Jpy trades below Nov. 19 low (88.62) Posted: 22 Nov 2009 11:42 PM PST Usd/Jpy has made a new low of 88.56, below Nov. 19 low of 88.62. It has since rebounded slightly and currently is trading at 88.64. If the pair can hold above a move back to the 88.80-85 level is likely. There is not much support for the pair below 88.62 thus a clean break can bring the pair down to 88.00 - 10.

Gbp/Usd has started retracing Friday’s slide Posted: 22 Nov 2009 10:18 PM PST Gbp/Usd is trading at the 38.2% Fibo retracement (1.6541) of Friday’s high of 1.6674. If the pair can break above 1.6541 the next level to keep an eye on is the 50% fibo at 1.6567. If the pair stays below 1.6500-05 should lend light support. It is also interesting to note that the 200 hour M/A lies at 1.6676, a shade above Friday’s high of 1.6674. For longer term bulls this could be a target if the pair moves higher.

11-23 Economic Calendar Posted: 22 Nov 2009 09:03 PM PST

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