Forex Market Updates & Commentary

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• ISM Manufacturing Index rises to 55.9 from 53.6. Higher than expectations
• $EURUSD. Watching support 1.4411/18
• $USDCAD falls on higher oil. Watch 1.0405/15 level
• January 4th 2009 NY Morning Forex Report is available for viewing
• Bobbys Corner-Open Market-Jan.4.2010
• $USDJPY. Is the pair looking to transition into a trend from a non-trend market? Watch the clues.
• For the USDCHF today, watch the 100 day moving average at 1.0311
• EURUSD remains supported in quiet trade. 1.4362/72 is support area to watch today.
• New York hits GBPUSD in early trade as the market focuses back on the dollar buying - for now.
• January 4th 2009 NY Opening Forex Report
• UK Economic Data
• 1-4 Economic Calendar
• HSBC Manufacturing PMI
• AIG Manufacturing Index

ISM Manufacturing Index rises to 55.9 from 53.6. Higher than expectations Posted: 04 Jan 2010 05:56 AM PST PRICES-PAID INDEX 61.5 VS 55.0 ORDER BACKLOG INDEX 50.0 VS 52.0 EMPLOYMENT INDEX 52.0 VS 50.8 INVENTORIES INDEX 43.4 VS 41.3 NEW ORDERS INDEX 65.5 VS 60.3 There is modest dollar selling off the number.  Overall, fairly quiet.  The EURUSD did hold the support at the 1.4411/18 level.  We will continue to look for support against this level.  A break should lead to further selling toward the 1.4376 level.

$EURUSD. Watching support 1.4411/18 Posted: 04 Jan 2010 05:43 AM PST Support for the EURUSD comes in at 1.4411/18.  Watch the level.  If the price can hold, the upside remains the bias for the pair.

$USDCAD falls on higher oil. Watch 1.0405/15 level Posted: 04 Jan 2010 05:33 AM PST The USDCAD fell sharply today on the back of stronger oil prices (up $1.70 on a futures basis) and gold (up $26).  The CAD$ tends to benefit on the back of stronger commodities.    The price action has seen the price move below the 1.0405/15 level which has been a floor for the pair over the last few months. Having said that, last week the  price dipped below this level on its way to a low 1.0365 but quickly rebounded.  The price low today reached 1.0370 and the failure to break 1.0365 has led to another short covering rally.  However, the high has reached 1.0405 level and stopped so far.  Look for sellers against the 1.0405/1.0415 level with stops on moves back above.  If the level is able to hold, look for selling to make another test of the 1.0365 level.

January 4th 2009 NY Morning Forex Report is available for viewing Posted: 04 Jan 2010 05:10 AM PST Click here to view the embedded video.

Bobbys Corner-Open Market-Jan.4.2010 Posted: 04 Jan 2010 04:53 AM PST Good Morning: HAPPY NEW YEAR! Higher yielding currencies took center stage in the New Year , as investors appetite for riskier assets rises. Oil rose for the 8Th day- trading above $80/barrel for the first time since November  2009.  Oil will be under pressure as colder temperatures hit the US. Stock rose worldwide, and commodities also traded higher as data from China showed manufacturing expanded at the fastest pace in over 5 years.  Oil: $80.90                                                  Gold:$1117.50   TODAY’S RELEASES TIME FOR  EST PRIOR 10:00AM  ISM MANUFACTURING  DEC  54.3O  53.6O 10:00AM  ISM PRICES PAID DEC  57.5O  55.O 10:00AM  CONSTRUCTION SPENDING MoM DEC  -O.5% 0.00% HAVE A GREAT DAY & GOOD LUCK

$USDJPY. Is the pair looking to transition into a trend from a non-trend market? Watch the clues. Posted: 04 Jan 2010 04:42 AM PST The USDJPY is non trending but as we all know when the market non-trends it often looks to trend.  At FXDD we look to define a non-trending market as one where the 100 and 200 bar MA converge.  Currently on the 5 minute chart the 100 and 200 bar MA are converged at 92.87, and the the price is starting to move away to the downside - reaching new lows for the day in the process.  If a trend like move is developing, then look for sellers on rallies with 92.76 being an intraday level to watch. Support targets at 92.28 area and below that 91.91.

For the USDCHF today, watch the 100 day moving average at 1.0311 Posted: 04 Jan 2010 04:20 AM PST The USDCHF dipped back below the 100 day MA on two occassions last week, but was not able to close below the key level.  The price has closed above the 100 day MA now for 12 straight days now.  Prior to the break higher, the price closed below the 100 day moving average since April 28th, 2009. Today the low for the USDCHF has reached 1.0321.  As long as the price can remain above the MA at 1.0311, look for profit taking buyers on dips. However, a break may not be as welcomed this time.  So watch the level closely today and if the price should break, look for confirming downside momentum to take the price below the lows from last week at the 1.0279 level. On the topside, look for resistance at the 1.0351 level where the 100 hour MA is  currently located with a move above next targeting the 1.0389 level where the 200 hour MA is currently found (green line in the chart below).

EURUSD remains supported in quiet trade. 1.4362/72 is support area to watch today. Posted: 04 Jan 2010 04:06 AM PST The NY day for the EURUSD has gotten off to a quiet start. The pair overnight reached a high price of 1.4416 just prior to NY entering, and has dipped modestly lower.  The bias remains bullish (price is above the 100 bar MA on the 5 minute and 100 hour charts), however, the action is quiet as the stock market opening and 10 AM US economic numbers are awaited (ISM and US Construction spending due at 10 AM with ISM up to 54. 1e and Construction Spending expected to fall by -0.5% in November).   Support this morning comes in at the 1.4362-72 area.  On Friday, the market consolidated in this narrow range and today, the price dipped and held this level.  The 100 hour MA also comes in this level currently.  So watch this level to provide early support.  On the topside, A break of the high at 1.4411/18 resistance area, targets last Thursday’s high at the 1.4440 level.

New York hits GBPUSD in early trade as the market focuses back on the dollar buying - for now. Posted: 04 Jan 2010 03:39 AM PST After rallying overnight on the back of stronger PMI data out of the UK this morning, NY has come in selling the pair (buying the dollar).  The price dipped below the key 1.6158 level but held the 100 bar MA on the 5 minute chart in early NY trading (BLUE LINE in the chart above).  Watch the 100 bar MA this morning. As long as the price can remain above, the bias remains to the upside. There is no economic data out at 8:30 AM in NY and Canada. At 10:00 AM the December ISM Manufacturing index is due with the expectation of an increase to 54.1 from 53.6 last month.  This would be the 5th month with the index above the 50 level which signals expansion.  The market tends to look at the Employment and New Order components.  Last month employment fell to 50.8 from 53.1.  The New Order component meanwhile  rose to 60.3 from 58.5 the prior month.  The recent high reached 64.9 in August 2009. The component pieces last month for comparison came in at the following: Manufacturing index   53.6 Prices paid                       55.0 Production                      59.9 New orders                     60.3 Backlog of orders        52.0 Supplier deliveries      55.7 Inventories                     41.3 Customer inventories  37.0 Employment                    50.8 New export orders         56.0 Imports                                51.5

January 4th 2009 NY Opening Forex Report Posted: 04 Jan 2010 03:14 AM PST Click here to view the embedded video.

UK Economic Data Posted: 04 Jan 2010 12:29 AM PST UK PMI Manufacturing came in at 54.1, stronger than the 52.0 expected. Mortgage Approvals were registered at 60,500, stronger than the 58,000 expected and a 3200 increase over the prior figure of 57,300. These are strong numbers for sterling as Gbp/Usd is up about 30 points, trading at current session high of 1.6195.

1-4 Economic Calendar Posted: 03 Jan 2010 07:29 PM PST

HSBC Manufacturing PMI Posted: 03 Jan 2010 05:43 PM PST China’s HSBC Manufacturing PMI came in slightly better than expected, but did little to sway the market. The reading for December was 56.1, slightly better than 55.7 for November.

AIG Manufacturing Index Posted: 03 Jan 2010 01:55 PM PST The Aussie, which has been trading a little higher thus far this session, was unaffected by a lower release of the AIG Manufacturing Index; which came in at 48.5 versus its prior reading of 51.2. Currently, the AUD is approaching the .9000 handle.

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