Forex Market Updates & Commentary

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• FXDD Webinar Thursday Jan 21 4pm Register
• Forex Morning Report - Jan 20th
• Bobbys Corner-Open Market-Jan.20.2010
• GBPUSD falls despite better Employment data today but holds support.
• EURUSD tests the 38.2% retracement of 2009 Low to high range
• The January 20th 2010 NY Opening Forex Report is available for viewing.
• MPC Meeting Minutes
• UK Claimant Count Change/ Unemployment
• German PPI
• Gbp/Usd threatening a break below 100 day M/A
• 1-20 Economic Calendar
• Japan’s Tamaki on the Wire
• IMF Strauss-Kahn Comments in Hong Kong
• New Zealand Q4 CPI
• EURUSD tries to bottom. Needs a push though

FXDD Webinar Thursday Jan 21 4pm Register Posted: 20 Jan 2010 06:46 AM PST Thursday January 21st 2010 at 4pm Register Here

Forex Morning Report - Jan 20th Posted: 20 Jan 2010 06:30 AM PST Click here to view the embedded video.

Bobbys Corner-Open Market-Jan.20.2010 Posted: 20 Jan 2010 05:26 AM PST Good Mornings: The USD and JPY rose as speculation that China’s curbing of bank lending may slow the global recovery. Trouble in Greece are still weighing very heavily on the Euro, and straining the Euro Zone’s economy in general. Comments from the IMF stating that Greece’s budget woes are “a serious problem”, and comments that China will pare lending after record amounts of new loans were processed in 2009 drove the FX markets to the safety of the JPY and USD . World equity markets were lower-and US Futures are also pointing to a lower opening this morning. Speculation that central banks may be considering raising interest rates as they see signs of economic recovery are also spooking the  equity markets-and driving FX investors to safe haven currencies. Oil:$77.87                                      Gold:$1130.20 Today’s data: TIME FOR  EST PRIOR 7:00A.M. MBA MORTGAGE APPLICATIONS 15-Jan 14.30% 8:30A.M. PPI MoM DEC. 1.80% 8:30A.M. PPI EX FOOD & ENERGY MoM DEC. 0.50% 8:30A.M. PPI YoY DEC. 2.40% 8:30A.M. PPI EX FOOD & ENERGY YoY DEC. 1.20% HAVE A GREAT DAY & GOOD LUCK

GBPUSD falls despite better Employment data today but holds support. Posted: 20 Jan 2010 05:12 AM PST The GBPUSD has fallen today despite stronger than expected Employment released. The comments from King yesterday on how he sees inflation being contained, and the overall flight into the dollar has contributed to the fall in the pair. From a technical basis, there has also been downside damage. The price moved through trendline support and the 100 hour moving average at the  1.6330 and 1.6324 levels respectively.  Off the Unemployment release, the price corrected up to test the 100 hour MA but held.  This led to another move to the downside for the pair as shorts felt comfortable selling against the level. The good news is the price has tested and held the 38.2% retracement of the move up from the January 2010  low reached at 1.5895.  That level comes in at the 1.6242.  The low reached 1.6243 and held.  Not far below that level is the 200 hour MA which comes in at 1.6234 currently (green line in the hourly chart above).  The two levels should provide buying/profit taking support today with a break likely leading to a move toward 1.6176 (50% of the 2010 low to high range).  Key support from daily chart comes in at 1.6158. This was a key level during the summer consolidation period.

EURUSD tests the 38.2% retracement of 2009 Low to high range Posted: 20 Jan 2010 04:45 AM PST The EURUSD is down testing the 38.2% retracement of the 2009 low to high range this morning at the 1.4117 level after another down day for the EURUSD. The pair has been hit on the back of Greek worries (Straus Kahn of the IMF was on the wires talking about the seriousness of the problem. Greece is looking for aid from the IMF), the dollars strength on the back of the Republicans victory in the Massachuesett Senate election (the people of Massachusetts are voting on the spending being done in Washington), and on China concerns as they indicate that bank lending needs to be stopped. This should slow global and lead to the flight into the dollar out of the riskier currency pairs. Despite all the bearishness in the EURUSD today, the support against the 38.2% retracement should attract some buying interest, with stops below.  If the price holds the support, a correction could take the pair up to the 1.4186 area where the 100 bar moving average on the 5 minute chart is found.  A move above the 100 bar MA would target the 1.4197 level which is the 38.2% of the last high to low trading range. On a break of 1.4117, look for a move toward the 1.4045 level (low from August 2009).  Longer term, if the price can keep its bearish bias (!) a move to the 1.3800 would be a target (50% of the 2009 move higher) with the interim lows from May and June being other possible support targets (see chart below).

The January 20th 2010 NY Opening Forex Report is available for viewing. Posted: 20 Jan 2010 04:32 AM PST Click here to view the embedded video.

MPC Meeting Minutes Posted: 20 Jan 2010 01:46 AM PST The following are statements from the MPC meeting minutes: BOE voted 9-0 to keep interest rates at 0.5 PCT, and to keep QE at 200 bln. Recent developments have not substantially changed their view on the medium term outlook. Short term inflation is likely to be higher than previously thought. CPI expectations will be monitored closely but it is expected to fall below target after near term spike. Data suggests that the UK economy has begun to expand again. A big fiscal consolidation is needed, policy will have to respond as the “picture clears”.

UK Claimant Count Change/ Unemployment Posted: 20 Jan 2010 01:37 AM PST Sterling sold off on the release of a worse than expected Claimant Count Change for December which came in at -15.2K  versus the forecast of -3.3K and prior reading of -6.3K. In addition,  the average earnings index reading was in line with the survey of 1.6%, up just slightly from the prior showing of 1.5%. The final release of out the UK was a better than expected unemployment rate which was 7.8%; lower than the previous reading of 7.9% and forecast of 8.9%. .

German PPI Posted: 19 Jan 2010 11:05 PM PST The market had a lack luster reaction to a worse than expected Producer Price Index out of Germany coming in at -0.2% versus its forecast of 0.2% and prior reading of 0.1% as the EUR currently trades on European session highs.

Gbp/Usd threatening a break below 100 day M/A Posted: 19 Jan 2010 09:21 PM PST Gbp/Usd is threatening to break below its 100 day M/A of 1.6310. From a daily perspective the next support level should come in about 100 points lower at 1.6207. This is a trendline of previous daily lows. If the 100 day M/A holds a move back up to 1.6370-80 is likely, though the pair does look bearish. Ultimate support is down at 1.6157, its 200 day M/A.

1-20 Economic Calendar Posted: 19 Jan 2010 08:58 PM PST

Japan’s Tamaki on the Wire Posted: 19 Jan 2010 07:37 PM PST The USD/JPY pair got a mild boost from the following comments from the Finance Ministries Tamaki. Japan started recovery in the Q2 of 2009. Total exports rose in first 20 days of December. Need to take care of deflation risk. Recovery still not robust. Need to take care of fiscal condition. Tax revenue has dropped sharply since 2009, same level as 1985. IMF played key role in supporting emerging market economies. Challenge is maintaining G20 momentum.

IMF Strauss-Kahn Comments in Hong Kong Posted: 19 Jan 2010 06:59 PM PST Says Asia has ‘crucial’ role in global recovery. Sees emerging nations tightening policies sooner. Welcomes China’s steps to boost domestic demand. Expects 2010 global growth faster than 3% forecast. Urges policy to keep supporting demand and employment. Asia should boost domestic demand and trade. IMF sees currency gains as ‘key response’ to capital flows. Expects sluggish growth in advanced economies. Must not lose the drive to reform the financial sector. Governments should shift stimulus toward jobs.

New Zealand Q4 CPI Posted: 19 Jan 2010 01:50 PM PST The 4th quarter New Zealand CPI came out softer than expected pushing the Kiwi marginally lower on the release. The details are as follows: CPI (QoQ) - Survey:0.0%   Actual:-0.2%   Prior:1.3% CPI (YoY) - Survey:2.1%   Actual:2.0%   Prior:1.7% The Kiwi is coming under less pressure as the commodity and positive carry currencies continue to outperform other pro-risk currencies against the USD. On the chart below we could see some light support develop below the 73 cent handle on Kiwi with a move below today’s lows.

EURUSD tries to bottom. Needs a push though Posted: 19 Jan 2010 11:22 AM PST The EURUSD is not out of the woods as activity remains light and momentum is tame.  The price has wandered above the 100 bar MA on the 5 minute chart but a move from 1.4387 to 1.4395 is not awe inspiring.  There is trendline resistance at the top level which may balance the breaking of the 100 bar MA.  If inclined to buy, buy against 1.4381 which is the 200 day MA. If inclined to sell, sell against the trendline, and look for a move above 1.4314 to confirm upside momentum.

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