Forex Market Updates & Commentary

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• Business Inventories rises by 0.4% . Sales increase 2.0%
• Forex Morning Report - Jan 14th
• GBPUSD coiling for a move? The battle lines are set
• USDJPY hurt the most on the worse than expected data
• EURUSD moves up to upside resistance and stalls
• Trichet press conference begins
• Data worse than expected. Retail Sales fall but better revisions
• USDJPY waiting for direction clues as it stalls at support/resistance
• Bobbys Corner-Open Market-Jan.14.2010
• The ECB keeps rates unchanged as expected. Trichet is due to speak at 8:30 AM
• January 14th 2009 NY Opening Forex Commentary is available for viewing
• EURUSD starts the NY day testing the 100 hour MA
• Eurozone Industrial Production stronger than expected
• Gbp/Usd testing 100 day M/A
• German Final CPI

Business Inventories rises by 0.4% . Sales increase 2.0% Posted: 14 Jan 2010 05:59 AM PST The higher inventories were met by even higher sales of 2.0% which lowered the inventory to sales ratio (or stockpiles) to 1.28 months. This is the lowest level since July of 2008 (see chart above)  Lower stockpiles implies additional inventory increases which could lead to higher GDP growth.  So overall, a positive report for the US economy.

Forex Morning Report - Jan 14th Posted: 14 Jan 2010 05:30 AM PST Click here to view the embedded video.

GBPUSD coiling for a move? The battle lines are set Posted: 14 Jan 2010 05:26 AM PST The GBPUSD seems to be coiling for a move. The topside resistance at the 100 day MA was broken on the weaker data, but EURUSD weakness led to selling pressure back down in the GBPUSD in sympathy. The price fell to support against the 100 and 200 bar MA on the 5 minute chart at the 1.6281/85 level.  Now the price is in between the two key levels - the 100 day MA and the 100 bar MA on the 5 minute chart. The lines in the sand are drawn. Is it ready for a move?  Do not count it out. The market action seems to be trading actively - at least for now.  Watch the levels and look for a break of 1.6308 with a move above 1.6322 confirming the upside.  While a move below the 1.6280 level signalling pressure down to 1.6250 as the next target on the bearish side.  From there, further momentum moves should be made in the direction of the break. Be aware and let’s see if the market is indeed ready.

USDJPY hurt the most on the worse than expected data Posted: 14 Jan 2010 04:57 AM PST The USDJPY gapped lower on the worse than expected data out of the US and has now moved below the 91.32, the downside target on a break lower (SEE PRIOR POST). The pair moved below the key 200 bar MA on the 5 minute chart at the 91.64 level, retraced to high of 91.60, and fell sharply.  The market closed yesterday at 91.36 which will be watched as topside resistance now.  91.28 was the low prior to the last move lower.  If the bearish bias is to continue watch for these levels to hold the profit taking correction higher.

EURUSD moves up to upside resistance and stalls Posted: 14 Jan 2010 04:37 AM PST As per the prior post the EURUSD has found resistance against thte 1.4518 level after the weaker than expected data and no real surprises from Trichet’s comments so far at least. The 100 bar MA on the 5 minute chart is at 1.4516 (blue line in the chart above) . The 200 bar is at 1.4520 currently (green line chart above). A move above should lead to further gains with 1.4545 the next target level above followed by double top today at 1.4555. On the downside, support remains against the 1.4588 level where the 100 hour MA is currently found (see blue line in the chart below). The market remains contained. Still awaiting a break. The market is likely to play the ranges until the break occurs.  Watch the key levels outlined above and in the charts shown.

Trichet press conference begins Posted: 14 Jan 2010 04:31 AM PST Highlights of Trichet comments: Economic activity uncertain. Rates are appropriate. Prices should remain subdued Growth should be moderate in 2010 Uneven recovery in Euro region Has benefitted from export recovery Drag on economy from balance sheet adjustments Low capacity to limit investment from businesses Unemployment likely to rise further Confidence may improve. Downside risk prevails from Financial Crisis Oil and global imbalances are also a risk ECB won’t change collateral framework for any country Inflation mainly an energy issue Greece leaving EU is absurd ECB will examine Greek plan carefully Countries need to take bold steps on budgets

Data worse than expected. Retail Sales fall but better revisions Posted: 14 Jan 2010 04:28 AM PST The Retail Sales came in at -0.3% vs +0.5%. The prior month revised higher however to 1.8% from 1.3% The Ex Auto fell -0.2% vs +0.3% expected. The prior month was revised higher to 1.9% from 1.2% Initial Claims rose to 444k from 433K last week, but Continuing Claims fell sharply to 4596K from 4807K last week.

USDJPY waiting for direction clues as it stalls at support/resistance Posted: 14 Jan 2010 04:16 AM PST The USDJPY is awaiting a directional clue perhaps from the economic data to be released at 8:30 AM. The market moved up today to test the 100 hour MA at the 91.89 level, reached a high of 92.03, but could not sustain the move, nor get close to the next confirming target at the 200 hour MA.  The price is currently back below the 100 hour MA currently at the 91.85 level.  As long as the price can remain below this level, the bias is to the downside.  A move above the MA, would target the 200 hour MA currently at the 92.15 level.  A move lower would look toward 91.32 as the next confirming target to get through.  On the downside, also watch the 91.63 level. This is the 200 bar MA on the 5 minute chart currently. The USDJPY has been more or less tracking the 200 bar MA of late with brief moves below but each time, the market has rebounded. A move below this time,  should be met with increased momentum, however.

Bobbys Corner-Open Market-Jan.14.2010 Posted: 14 Jan 2010 04:14 AM PST Good Morning: News from the Euro-Zone this morning was as expected with the ECB leaving interest rates stable at 1%-as the EZ economy continues to recover from the worst recession since World War 2. At 8:30 this morning the ECB will have a press conference-and it will be interesting to  see what comments Mr. Trichet says about growth in 2010 within the EZ. Today North America will be looking at Retail Sales, Import Prices, and Jobless Claims.(see below) World equity markets rose as investor confidence in economic growth along with speculation that central banks will continue to keep interest rates at record lows helped keep equities in positive territory. . Oil traded below $80/barrel. Oil:$79.91                                   Gold:$1134.40 Today’s data:   TIME FOR  EST PRIOR 7:45A.M. ECB RATE DECISION         8:30A.M. ECB PRESS CONFERENCE       8:30A.M. IMPORT PRICE INDEX MoM DEC. -0.10% 1.70% 8:30A.M. IMPORT PRICE INDEX YoY   DEC. 8.50% 3.70% 8:30A.M. ADVANCE RETAIL SALES   DEC. 0.40% 1.30% 8:30A.M. RETAIL SALES LESS AUTOS DEC. 0.30% 1.20% 8:30A.M. RETAIL SALES EX AUTO & GAS DEC. 0.40% 0.60% 8:30A.M. INITIAL JOBLESS CLAIMS   9-Jan 438K    434K 8:30A.M. CONTINUING CLAIMS   2-Jan       4950K    4802K 10:00A.M. BUSINESS INVENTORIES   NOV. 0.00% 0.20% HAVE A GREAT DAY & GOOD LUCK

The ECB keeps rates unchanged as expected. Trichet is due to speak at 8:30 AM Posted: 14 Jan 2010 03:44 AM PST Trichet is likely to temper his comments with concern about the weaker members of the EU (i.e. Greece).

January 14th 2009 NY Opening Forex Commentary is available for viewing Posted: 14 Jan 2010 03:36 AM PST Click here to view the embedded video.

EURUSD starts the NY day testing the 100 hour MA Posted: 14 Jan 2010 03:36 AM PST The 100 hour moving average for the EURUSD comes in at the 1.4487 and NY is testing that moving average as they enter. The EURUSD has been consolidating over the last 3+ day after moving higher on Monday.  The price has been in a narrow trading range during that time staying between 1.4458 and 1.4579.  The 121 pips is narrow and the market is likely to extend outside the range at some point - or at least you would think.  At 7::45 the ECB will announce the results of their monthly meeting. The expectation is for no change but the market will be interested in hearing the thoughts of ECB President Jean Claude Trichet at 8:30 AM. He is likely to balance a recovering economy with worries about sovereign debt of weaker EU countries like Greece.  At 8:30, the US will release Retail Sales (+0.5% exp vs +1.3%, ex Auto +0.3% vs +1.2% last month), Initial Claims (437K vs 434K last)), Import Price (+0.0% expected and YoY rising sharply to +8.6%), and finally Business Inventories which is expected to show a gain of 0.3% vs +0.2%. From a technical perspective, a move below the 100 hour MA would turn the bias to the downside.  Support comes in at 1.4458 and the 1.4421/30 area where the 200 hour MA (1.4430) and the 50% retracement (1.4421) is located. The topside resistance comes in at the 1.4510/18 level this morning. The 1.4510 level is the close from yesterday and 1.4518 is the 100/200 bar MA on the 5 minute chart. If the bias is going to remain to the downside, the price will need to stay below these 2 key moving averages this morning.

Eurozone Industrial Production stronger than expected Posted: 14 Jan 2010 12:58 AM PST Eurozone Industrial Production m/m came in at 1.0%, stronger than the 0.6% expected. This positive number for the euro seems to have halted Eur/Usd’s downward move for the time being. The pair was poised to test session lows of 1.4495 at time of release and currently trades at 1.4510.

Gbp/Usd testing 100 day M/A Posted: 13 Jan 2010 10:22 PM PST Gbp/Usd is trading just off its 100 day M/A of 1.6308 for 2nd time in as many hours. If the pair can break and hold above this level a move to 1.6500 is possible. If it remains below short term support lies at 1.6240-45 level with the 200 day M/A down at 1.6125.

German Final CPI Posted: 13 Jan 2010 09:57 PM PST German Final CPI m/m came in at 0.8%, stronger than the 0.7% expected. No market effect from this figure in a very slow start to the session. Eur/Usd and Eur/Gbp remain at 1.4540 and .8930.

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