Friday, December 18, 2009

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

Dec 18 2009 Forex Market Update

Posted: 18 Dec 2009 05:50 AM PST

USDCAD. Watch 100 hour moving average support at 1.0635. Key level.

Posted: 18 Dec 2009 05:35 AM PST

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The USDCAD has tested and remained above the 100 hour MA a few times over the last few days.  The price is down looking to test the 100 hour MA once again at the 1.0635 level.  A move below this level should solicit additional pressure on the pair, especially in light that the price is also back below the 100 day moving average today. Yesterday, the price closed above this key longer term moving average at the 1.0686 level, but today the move back below puts into question the bullish long term bias (NOTE: the price also moved above and below the trendline - see daily chart below). 

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Watch the 100 hour MA for key directional clues today.  A break below adds another bearish reason from a technical perspective (below 100 day and 100 hour).  It would next target 1.0600 where the 200 hour MA is found (green line in hourly chart).  If the support can hold once again, it may give the bulls the impetus to take the pair back higher toward the key 100 day moving average level (at 1.0686).  Key time for the pair.

Rebroadcast of the Dec 17th 2009 Webinar now live

Posted: 18 Dec 2009 04:39 AM PST

Rebroadcast of the Dec 17th 2009 Webinar now live, go to http://forex.fxdd.com/webinars to watch

GBPUSD back down testing 1.6158 level

Posted: 18 Dec 2009 04:28 AM PST

14The GBPUSD has moved lower and looks to correct to the 1.6158 level. The 1.6158 level has been a support level off the daily chart most of the activity since the summer has found support at around the 1.6158 area.  Look for support at this area. 

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Overnight, the pair tested the 100 hour MA at the 1.6250 level (see chart above). The high reached 1.6248.  The high also corresponded with resistance against the 50% retracement of the last move down from the Wednesday high. The level comes in at 1.6244.  As long as the price remains below this moving average/retracement resistance level, the intermedate term bias remains to the downside for the pair. 

15

Looking at the shorter  term 5 minute chart, the price action remains consolidative.  The price has moved above and below the 100 and 200 bar MAs on a number of occassions today.   This is indicative of a non trend market.  Now with the price below both 100 and 200 bar MAs (at 1.6192 and 1.6182) respectively, the bias is negative from this shorter term intraday perspective as well.  Keep an eye on these levels.  If the price can remain below the moving average levels, look for a test of the 1.6158 level.   Decision time for the GBPUSD.

Bobbys Corner-Open Market-Dec.18.2009

Posted: 18 Dec 2009 04:06 AM PST

bob-slade-forex-2-150x200Good Morning:

The JPY lost  ground against overnight after the BOJ (Bank of Japan) made comments and indicated that they will leave interest rates near zero.
The Euro had some positive action overnight-as German Business Confidence (IFO) rose last month.

European equity markets are higher this morning.  US Futures are also pointing to a higher opening this morning.
Asian equity markets closed lower.
Commodities are also higher at this time.

Oil:$73.96                             Gold:$1108.10

No major data today.

HAVE A GREAT DAY-WEEKEND & GOOD LUCK

EURUSD bouncing around today. Pressured in early NY trade on rumors

Posted: 18 Dec 2009 03:59 AM PST

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The EURUSD bounced off the lows from yesterday in early trade last night and it gave the profit takers/shorts a reason to cover.  The price moved above 100 bar MA and then the 200 bar on the 5 minute chart and the correction was off and away.  The price moved up to the 38.2% retracement of the move down from Wednesday’s high at the 1.4413 level (high reached 1.4411) . 

The price has come off in early trade today on rumors (unconfirmed) that Iranian forces stormed an Iraqi oil field.  This has led to a flight into US dollars early on.  Now the price is testing the close from yesterday at 1.4437.

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With the price back below the shorter term moving averages the bias is back negative.  The 200 bar MA comes in at the 1.4368 level.  Look for resistance against this level now.  On the downside, the 1.4325 level and the 1.4304 are the next targets in the consolidation range following the large break down yesterday.  Breaks of these support/resistance levels should see further directional probing.

UK Public Sector Net Borrowing

Posted: 18 Dec 2009 12:32 AM PST

UK Public Sector Net Borrowing came in at 20.3B, less than the 23.1B expected, however its is nearly double last month’s 10.2B.

Not much market reaction to this release as Gbp/Usd remains just south of 1.6200.

German IFO & Eurozone Current Account

Posted: 18 Dec 2009 12:02 AM PST

German IFO Business Climate came in at 94.7, stronger than the 94.5 expected.

German IFO Current Assessment came in at 90.5, stronger than the 90.0 expected.

German IFO Expectations came in at 99.1, stronger than the 99.0 expected.

Eurozone Current Account came in at -4.6B, weaker than the -2.3B expected.

It would seem that the weaker Current Account figures out of the Eurozone trumped the positive IFO Survey numbers out of Germany as Eur/Usd has sold off about 15 points thus far, currently trading at 1.4380.

BOJ Shirakawa comments from news conference

Posted: 17 Dec 2009 11:46 PM PST

Bank of Japan Governor Masaaki Shirakawa said on Friday the central bank’s new definition of long-term price stability does not mean monetary policy will be guided by short-term price moves alone. Earlier, the central bank left rates at 0.1% as expected, but indicated it would not tolerate deflation. This may bring about further monetary easing.

Here are some quotes from Shirakawa;

-In guiding policy, it is important to examine our economic scenarios by monitoring prices

-Looking back at the period before the financial crisis, prices had been stable in each country since the middle of the 2000s and low inflation had continued amid disinflation

-Prices are important but you may overlook imbalances in the overall economy if you are looking only at prices … It became clearer that we need to pay heed to this as a result of the financial crisis.

-Price stability is of course important but it is inappropriate to guide short-term monetary policy just by looking at underlying price moves

-The clarification of our understanding on price stability that we announced today is different from when the BOJ committed itself to maintaining quantitative easing until prices turned positive

-There is no pre-commitment to our future monetary policy decisions

Trader talk; Middle Eastern buyers of sterling start push towards 100 hour M/A

Posted: 17 Dec 2009 11:15 PM PST

Gbp/Usd broke above the 38.2% Fibo retracement of 1.6203 on apparent Middle Eastern buying interest. The pair rapidly is approaching key resistance at 1.6250, its 100 hour M/A. Upon first approach of this level it appears the pair has lost some steam. A pullback to 1.6203 is likely. If sterling continues higher 1.6265-70 should add to the resistance.

vincent_fx00025

German PPI

Posted: 17 Dec 2009 10:01 PM PST

German PPI m/m came in at 0.1%, weaker than the 0.2% expected.

Eur/Usd came off about 20 points to trade down to 1.4359 on heels of release.

12-18 Economic Calendar

Posted: 17 Dec 2009 07:55 PM PST

region_forex_00014

BOJ Rate Decision -> Unchanged

Posted: 17 Dec 2009 06:21 PM PST

The Bank of Japan kept rates unchanged at .10% and added the following comments which evoked no reaction from the JPY as the early session moves have subsided.

  • Momentum for self sustaining recovery is insufficient.
  • BOJ does not tolerate a CPI rate at or below 0%.
  • Sees prices stable in positive range at 2% or lower.
  • Medium of stable prices at about 1%.
  • Overcoming deflation is critical challenge.
  • Unstable currencies may affect economy.
  • Economy is picking up.
  • Economy’s improvement to be moderate until mid FY2010.

Euro Recovering Off Lows

Posted: 17 Dec 2009 05:33 PM PST

The EUR/USD pair has recovered from the 1.4304 lows and has rallied a full figure on what continues to be a thin and volatile environment, with little to no significant news or economic releases. The channel below for the EUR/USD has held from the beginning of the month and we will continue to watch it into the New Year.

eurusd4

The EUR/CHF pair also took a more dramatic tumble earlier in the session, as a large stops seemed to filled below the 1.50 handle all the way down to  1.4907 before rebounding with the rest of the risk currencies.

eurchf

Bank of England Financial Stability Report

Posted: 17 Dec 2009 03:39 PM PST

  • The BOE says the banks have potential international sovereign risks.
  • Asset prices rally setback would pose risk to banks.
  • Lenders should retain more earnings to boost capital.
  • Asset price rally feeding investor appetite for risk.
  • UK consumers are stretched and unsecured debt is high.
  • Global banks’ balance sheets ‘remain stretched.’
  • Significant bank funding fragilities persist.
  • Banks should take advantage of favorable markets now.
  • UK financial system is ’significantly more stable.’
  • Official stimulus has fueled improvement in stability.
  • Stimulus withdrawals may fuel asset-price volatility.
  • Stimulus exits could lead to dollar trade unwinding.

The markets have had a limited reaction to this report as a thin and volatile market continues to rule. The final pro-USD comment from the BOE could continue to help fuel the USD bid into year-end.
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