Forex Market Updates & Commentary

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• Chicago PMI comes in at 56.1 for the month of November.
• November 30th 2009 Morning Forex Report is available for viewing
• GBPUSD feels more pressure today, but still unchanged on the day. 1.6414 is the 100 day moving average. Key support.
• Bobbys Corner-Open Market-Nov.30.2009
• Canada GDP MoM come in as expected. YoY lower on prior quarter revision higher
• Canada GDP due out at 8:30 AM
• Chicago PMI Index to be released at 9:45 AM. Milwaukee PMI at 10AM
• $EURUSD falls below 200 bar MA support, but has support at 1.5008
• UK Net Lending, Consumer Credit and Mortgage Approvals
• Eur/Gbp approaching Friday’s high
• BOE may be too optimistic on recovery says BDO
• 11-30 Economic Calendar
• BOJ Governor Shirakawa Speaks
• Risk Pairs Gain a Bid
• UK GfK Consumer Confidence

Chicago PMI comes in at 56.1 for the month of November. Posted: 30 Nov 2009 06:47 AM PST Chicago PMI came in better than expected at  56.1 for the month of November.  This was the highest reading since August 2008.  New Orders rose to 62.8 spurred on by better foreign sales .  Order backlog also increased. The Inventories remains low which is good for future production. Prices paid          52.6  vs 48.6 Production           57.6  vs 63.9 New orders           62.8  vs 61.4 Order backlogs       46.5  vs 41.9 Inventories          34.9  vs 32.2 Employment           41.9 vs  38.3 Supplier deliveries  57.4 vs  50.7 The better than expected data will likely be supportive of stocks which in turn should benefit the EURUSD.  Watching the 1.5000 support level for the pair.

November 30th 2009 Morning Forex Report is available for viewing Posted: 30 Nov 2009 06:45 AM PST Click here to view the embedded video.

GBPUSD feels more pressure today, but still unchanged on the day. 1.6414 is the 100 day moving average. Key support. Posted: 30 Nov 2009 05:58 AM PST The GBPUSD moved higher intially overnight reaching a high price fo 1.6592 but the 1.6600 level was too hard a level to break through and the price started to give up the gains.  From a fundamental perspective, the thought is although Abu Dhabi is standing behind its banking system to absorb losses or runs on the banks, it is not directily bailing out the Dubai World conglomerate.  It is felt that the UK banks are most exposed to the over ambitious projects and therefore if there is a loser it would be the GBP.  The price nevertheless remains above the close from Friday at the 1.6471 level. The low today did extend tdown to the 1.6454 level but that move was quickly reversed.  The price is back below the 100 and 200 bar MA on the 5 minute charts at the 1.6514 and 1.6526 levels and that gives a negative short term bias.  A move toward these moving average levels will likely attract sellers.  On the downside, watch the 1.6470 level and then a break of the low for the day to signal more pressure, with next target at 1.6433. A KEY level to watch is the 1.6414 level. This is the 100 day MA. On Friday, the price fell below this level and sold off hard toward the November low price of 1.6260 (low on Friday reached 1.6270). I would expect buyers against this level should the price be further pressured today.

Bobbys Corner-Open Market-Nov.30.2009 Posted: 30 Nov 2009 05:41 AM PST Good Morning: As some in the United States are awakening to a new week after a long Thanksgiving holiday weekend, the markets have had quite a roller coaster ride the past few days. The main concern stemmed from reports last week that state owned Dubai World may default on as much as $90 Billion.  This caused the USD to rally and world wide equity markets to fall, along with commodities.  Since the initial report, markets are trying to get a grasp on the depth of this potential default on a global scale.  The UAE (United Arab Emirates’) Central Bank  has stated that it “stands behind” Dubai’s local and foreign lenders.  I am not clear on exactly what this rhetoric is really about as Dubai’s Government has stated that it does not guarantee the debt of the state owned entity.  Dubai World is hoping that creditors will help in any restructuring process. Overnight the USD has weakened, Asian equities were higher, European stocks are lower, and US Futures are slightly ahead this morning. Oil: $76.18                                        Gold;$1172.60 Today’s data: CHI PMI:                 exp: 53.0              prior: 54.2 HAVE A GREAT DAY & GOOD LUCK

Canada GDP MoM come in as expected. YoY lower on prior quarter revision higher Posted: 30 Nov 2009 05:36 AM PST The MoM GDP rose by 0.4% for the month and the annualized rate for the 3Q rose by 0.4%.  The MoM gain was as expected.  The YoY number was lower than expectations at +0.4% versus +1.0%.  The prior quarter was revised to -3.1% from -3.4%.  Meanwhile, also out of Canada the Industrial Product Price index fell by -0.3% versus expectations of +0.3%, and the Raw Material Price index rose by 2.5% for the month versus expectations of +3.3%. The prices were lower on the back of lower import prices because of the stronger Canadian dollar. The USDCAD has rallied off the data and moved back toward the 100 and 200 hour moving averages. The 100 hour moving average comes in at the 1.0570 level.  The 200 hour MA comes in at the 1.0585 level.  If the price moves above the 100 hour MA, the bias is positive.  Look for a move above the 200 hour MA to confirm the bias.   A move below gives a negative bias.

Canada GDP due out at 8:30 AM Posted: 30 Nov 2009 05:24 AM PST The September and 3Q GDP figures will be released in Canada today. The expectation is for a gain of 0.4% vs a -0.1% decline in August.  The 3Q is expected to show a gain of 1.0% which is up from the -3.4% decline in the 2Q.  This is an annualized figure, similar to the USA.

Chicago PMI Index to be released at 9:45 AM. Milwaukee PMI at 10AM Posted: 30 Nov 2009 05:06 AM PST The Chicago PMI index, the 4th in a series of regional indices, will be released at 9:45 AM NYT.  The expectation is for a decline to 53.3 versus 54.2 last month.  The reading over the 50 level will be the 3rd time in the last 4 months that the index has been above the 50 level.  Below are October component pieces.  Production and New orders soared from the prior month (47.2 and 46.3 respectively).  Prices paid             48.6 Production              63.9 New orders              61.4 Order backlogs     41.9 Inventories             32.2 Employment          38.3 Supplier deliveries  50.7   At 10.00 AM the Milwaukee regional manufacturing index will be released. There is no estimate for this index. Last month the index came in at 50.0.  This was down sharply from the prior month when the index reached a 19 month high of 58.

$EURUSD falls below 200 bar MA support, but has support at 1.5008 Posted: 30 Nov 2009 04:47 AM PST NY has entered the fray and has pushed the EURUSD back down below the 200 bar MA on the 5 minute chart (green line).  The price has been consolidating after the higher opening and move higher post the Abu Dhabi rescue of Dubai over the weekend.  Although comforting to debt holders, the fundamental viability of the over ambitious projects remains in question.  Nevertheless, the save has been made.  The pair moved to a high of 1.5083 but backed off.  Last Wednesday and Thursday, there were high price ceilings at the 1.5095 area. This area seemed to attract profit taking sellers this morning.  The move back down has support at the 100 hour MA which comes in at the  1.5007 level currently.  This level should bring back some buyers.  A break below will look to target 1.4986 and then the 200 hour MA at the 14964 level. On the topside, watch 1.5048 level where the 100 bar MA on the 5 minute chart is found.  It seems we are in a point of transition now as the NY market decides the course and perhaps the market awaits the stock market opening.  The Dow futures are showing a small 14 point decline. The S & P index is down 1.50 points.   Oil is pretty much unchanged.

UK Net Lending, Consumer Credit and Mortgage Approvals Posted: 30 Nov 2009 01:37 AM PST UK Mortgage Approvals came in at 57,000, less than the 59,000 estimate, but greatwer than the prior reading of 56,00. Net Consumer Credit came in at -0.6B, weaker than the -0.2B expected and prior reading of -0.3B. Net Lending to Individuals came in at 0.3B, weaker than the 0.8B expected and 0.6B prior reading. Overall not strong numbers for cable as Gbp/Usd back about 15 points, currently trading at 1.6510.

Eur/Gbp approaching Friday’s high Posted: 30 Nov 2009 12:43 AM PST Eur/Gbp has been on a steady incline and is approaching Friday’s high of .9132. From an hourly perspective the 38.2% Fibo (.9072) should be a level of support if the pair pulls back at all. A break above could see Eur/Gbp ascend to the .9155-60 area. From a daily point of view, if the pair can break and hold above .9122, which is the 50% Fibo of move down from early October high of .9410, .9190 would be next target on upside. A failed break should bring the pair back down to the .9055-60 level. Keep in mind that you’ve got the usual Bundesbank month end purchase of eur/Gbp also in play which may keep the pair elevated.

BOE may be too optimistic on recovery says BDO Posted: 29 Nov 2009 11:01 PM PST According to a survey of businesses by BDO Stoy Hayward, the Bank of England's predictions of a U.K. economic recovery next year are "too optimistic." This month's business trends report suggests quarterly economic growth over the next six months of less than 0.5 percent which is far short of a  strong return to growth, according to the accounting firm. Forecasting by the central bank's MPC  is based on an out of date forecast from April, BDO Partner Peter Hemington said in a statement. "The Bank of England expects growth to surpass 2.5 percent towards the end of 2010, but its inflation report has not fully taken into account the extent of next year's fiscal tightening." Business confidence is still "fragile" and companies don't predict a return to strong growth in the short term, Hemington said.  The Bank of England has to be aware of the weakness in growth when considering tightening its policies on quantitative easing and interest rates, the BDO said. The organization also called on Chancellor of the Exchequer Alistair Darling to use his Dec. 9 pre-budget report to focus on cutting public spending rather than imposing a heavier tax burden on business to reduce Britain's budget deficit. As we approach the European open it will be intersting to see if this opinion gains any traction in early trading.

11-30 Economic Calendar Posted: 29 Nov 2009 09:01 PM PST

BOJ Governor Shirakawa Speaks Posted: 29 Nov 2009 05:45 PM PST Speaking at a meeting with business executives in Nagoya, BOJ governor Shirakawa made the following statements: BOJ is to keep extremely accommodative environment. Growth may slow in the Spring as stimulus wanes. The recovery at home and abroad won’t be terminated. Economic outlook is uncertain. The JOB is ready to take bold and swift action.

Risk Pairs Gain a Bid Posted: 29 Nov 2009 05:42 PM PST Risk and commodity pairs have caught a bid to start the trading week as oil and equities are all trading up regardless of the negative data received earlier in the session (lower JPY industrial production & UK consumer confidence.) For the AUD/USD we see the pair approaching the 100 hr moving average and the 61.8% retracement of last weeks move, we will watch and see if the pair runs into any resistance at this level.

UK GfK Consumer Confidence Posted: 29 Nov 2009 04:06 PM PST The GfK Confidence number for November was allegedly leaked 40 minutes before its scheduled release which came in at -17; worse than its forecast of -11 and prior reading of -13. The GBP/USD went offered over the last 5 minutes falling from just above the 1.65 handle to its current bid price of 1.6475.

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