Forex Market Updates & Commentary

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• Forex Morning Report - Jan 13th
• USDCAD tests support after holding key resistance at 1.0405/15
• EURUSD tests 38.2% resistance at 1.4571
• Bobbys Corner-Open Market-Jan.13.2010
• GBPUSD approaches key technical resistance at 1.6309. Looking for profit taking sellers.
• January 13th 2010 FXDD NY Opening Forex Commentary is available for viewing
• UK Manufacturing & Industrial Production
• Italian Industrial Production m/m
• German GDP Worse Than Expected
• French CPI
• 1-13 Economic Calendar
• Fed’s Plosser Speaks in Philadelphia (EUR/USD)
• Fed’s Fisher Speaks in Texas
• USDCAD stalls at the topside resistance level
• Gold is falling sharply. AUDUSD falls through trendline support

Forex Morning Report - Jan 13th Posted: 13 Jan 2010 05:25 AM PST Click here to view the embedded video.

USDCAD tests support after holding key resistance at 1.0405/15 Posted: 13 Jan 2010 05:15 AM PST As per the comment yesterday, the USDCAD held resistance at the 1.0405/15 level (see prior post here) and moved lower.  The price is now down testing the 100 hour moving average at the 1.0335 level.   The price has slowed at the level but pressure remains.   The next downside target comes in at the 1.0291 where a price floor was established on Jan 7th and 8th before breaking down on January 11th. The move back higher used the level as a springboard higher.  The market is at a key level.  A move above the 100 hour MA should lead to a move back up to the 200 hour MA at the  1.0367 level.  If the price falls below, look for 1.0291 to be the next step.

EURUSD tests 38.2% resistance at 1.4571 Posted: 13 Jan 2010 04:11 AM PST The EURUSD is up testing the 38.2% retracement of the move down from the November high of 1.5144 and the December low of 1.4217. The level comes in at the 1.4571 price.  A break above would next target the low from November at the 1.4626 level and above that the 100 day moving average at the 1.4680 level.  Watch for support close by at the 1.4645/56 level which were the respective highs yesterday and on Monday.  If the market can hold these two levels, a move higher is likely. If not, look for a consolidation trade this morning with additional support at the 1.4532 (38.2% of the days range) and 1.4518 (50% of the days range) as the price has trended far from the 100 bar MA on the 5 minute chart and a period to allow a “catch up” may be warranted.

Bobbys Corner-Open Market-Jan.13.2010 Posted: 13 Jan 2010 04:09 AM PST Good Morning: Comments from Bank of England policy maker Sentancethat cited that interest rates may have to increase in the UK,  helped the GBP rise. The idea of removing some stimulus measures is premature at this time, but we are seeing signals from various central bankers that this is the direction that they will be pursuing in the near future.  The USD is weaker, as is the JPY. Equity markets were mixed in Asia, are also mixed in Europe.  The US Futures are slightly higher at this time. Oil fluctuated either side of $80/barrel.  Most commodity markets also saw lower prices overnight. Oil:$80.08                                  Gold:$1135.10      TODAY’S RELEASES TIME FOR  EST PRIOR 7:00A.M. MBA MORTGAGE APPLICATIONS 8-Jan   0.50% 2:00P.M. MONTHLY BUDGET STATEMENT DEC. -$78.5B -$51.8B 2:00P.M. FEDS BEIGE BOOK                       HAVE A GREAT DAY & GOOD LUCK

GBPUSD approaches key technical resistance at 1.6309. Looking for profit taking sellers. Posted: 13 Jan 2010 03:43 AM PST The GBPUSD is approaching the key 100 day moving average at the 1.6309 level (high reached 1.6293 today.  SEE POST outling target level from yesterday). The GBPUSD has been supported today by a comment from BOE Andrew Sentance who said the central bank may have to raise rates in 2010.  This increases the demand for the currency.  Nevertheless,  I would expect that the market should find profit taking sellers as the market momentum slows before the key level.  Trader’s will use the level as a low risk back board, with a break above leading to covering.  On a break, the next target would come in at the 1.6354 level which is the 50% retracement of the move down from the November high.  Support today comes in a the 1.6232 level now where the 38.2% retracement level is found (from high of 1.6876 in November to the low reached in December at the 1.5832 level).  The level is also the 38.2% retracement of the days trading range today (see 5 minute chart below).

January 13th 2010 FXDD NY Opening Forex Commentary is available for viewing Posted: 13 Jan 2010 03:18 AM PST Click here to view the embedded video.

UK Manufacturing & Industrial Production Posted: 13 Jan 2010 12:31 AM PST UK Manufacturing Production m/m came in at 0.0%, weaker than the 0.2% expected. Y/y came in at -5.4%, weaker than the -5.1% expected. UK Inustrial Production m/m  came in at 0.4%, stronger than the 0.3% expected. Y/y came in at -6.0%, stronger than the -6.1% expected. Sterling continues to make new highs as weaker manufacturing number does not hurt the currency. Gbp/Usd trades at 1.6260, Gbp/Jpy at 148.60 and Eur/Gbp at .8920.

Italian Industrial Production m/m Posted: 12 Jan 2010 11:56 PM PST The market showed a limited reaction to Italy’s Industrial Production, which came in at  0.2%; lower than its forecast and prior reading of 0.8% and 0.5%.

German GDP Worse Than Expected Posted: 12 Jan 2010 11:02 PM PST The EUR traded lower against the USD and JPY after an early release of Germany’s GDP which came in worse than forecasted at -5.0% versus its survey of -4.8% and prior release of 1.3%.

French CPI Posted: 12 Jan 2010 10:43 PM PST Consumer Price Index out of France came in at 0.3%, in line with its forecast and slightly better than the prior reading of 0.1%.  The EUR traded slightly higher on the back of the release as it pushes towards the 1.4500 handle.

1-13 Economic Calendar Posted: 12 Jan 2010 07:27 PM PST

Fed’s Plosser Speaks in Philadelphia (EUR/USD) Posted: 12 Jan 2010 03:13 PM PST The Fed’s Plosser continued to help the USD gain early in the session, as he made the following comments in a speech in Philadelphia: Fed should complete MBS purchases this quarter. He’s confident jobless rate to fall be the end of the year. Expects the economy to grow 3 - 3.5% in 2010 and 2011. Exit strategy must prevent unacceptably high inflation. Large fiscal deficits are ‘inhibiting growth.’ Rate rise must come before an ‘acceptable’ jobless rate. Exit strategy must prevent unacceptably high inflation. Plosser’s comments in regards to raising rates ahead of an ‘acceptable’ jobless rate and the fact that MBS (Mortgage Backed Securities) purchases should be completed by the Fed at the end of the quarter has continued to help the USD across the board. For the EUR/USD pair the lows from yesterday look to be in play and a break could lead us to the pre-Non Farm Payroll levels. However first the 50% retracement of the aforementioned move could provide some support between the 100 and 200 hour moving averages.

Fed’s Fisher Speaks in Texas Posted: 12 Jan 2010 02:58 PM PST The Dallas Fed Governor Fisher had the following comments during a speech in Waco Texas. The USD showed some mild gains on his comments: Economy faces ‘many roadblocks’ to recovery. ‘Politicizing’ the Fed may result in ‘economic ruin.’ US economy in a ‘tepid’ recovery. Congress needs to return the US to ‘fiscal sanity.’ ‘Banks must be willing and able to lend again.’ US consumers and businesses need more confidence. ‘Housing market needs to heal on its own.’ ‘Light at the end of tunnel’ for small business.

USDCAD stalls at the topside resistance level Posted: 12 Jan 2010 10:00 AM PST The USDCAD has moved up to the resistance area outlined in earlier post from this morning (click here). The 1.0405 to 1.0415 level remains a key level to watch as it represents an old floor, and is also Fibonacci resistance at 1.0413 (50% of the move down from the end of December high of 1.0575 to the low of 1.0251 reached yesterday). The last move higher was spurred by the sharp fall in gold which has paused at support (see prior post).  So traders are likely to continue to be influenced by the commodities and also from the key resistance at the 1.0415 top.  Look for sellers with stops on a break higher.

Gold is falling sharply. AUDUSD falls through trendline support Posted: 12 Jan 2010 09:16 AM PST Dollar may benefit.  Commodity currencies coming under pressure with the AUDUSD falling through trendline support at the 0.9196 level.  The 200 hour MA is target support now at 0.9138 level. Additional support at the 0.9098 level where the 38.2% retracement support is found. Look for the trendline support to now be upside resistance at the 0.9196 level. The market should stay below this level to keep the bearish bias short term.

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