Forex Market Updates & Commentary |  |
- Pending Home Sales come in as expected. USDJPY dips to key support target
- Forex Morning Report - Feb 2
- EURUSD tests 100 hour MA again
- USDJPY continues to have ceiling resistance at 90.90. Look for 90.20 support today
- GBPUSD stuck in the range with choppy trading in between.
- No 8:30 AM Economic releases due
- AUDUSD corrects higher off failure to extend the downside, but no cut has the currency pressured
- EURUSD tests the 100 hour MA and finding some profit taking sellers
- February 2, 2010 NY Opening Forex Commentary is available for viewing
- EUR PPI m/m
- German Retail Sales m/m
- Swiss SECO Consumer Climate
- Aussie Keeps Rates Unchanged @ 3.75%
- NAB Business Confidence
- Forex Evening Report - Feb 1
| Pending Home Sales come in as expected. USDJPY dips to key support target Posted: 02 Feb 2010 07:10 AM PST The Pending Home sales came in at +1.0% which was spot on what was expected. The market corrected off the most recent action with the EURUSD coming off a bit as has the GBPUSD. Action in those currency pairs remain contained.
The USDJPY has meanwhile moved lower to test key support at the 90.20 area where the 100 day MA, the 100 hour (90.22), the 200 hour (90.19 currently) and the trendline 90.21 all converge. I would expect buyers against these levels with stops on a move below. |
| Posted: 02 Feb 2010 06:57 AM PST |
| EURUSD tests 100 hour MA again Posted: 02 Feb 2010 06:40 AM PST
The EURUSD has tested the 100 hour MA again at the 1.3953 level and so far held again. The good news for the pair is looking at the 5 minute chart the price held the days range support at the 1.3930 level. This level was outlined in an earlier post (CLICK HERE). The NY range continues to remain narrow, however, and will need a break to heat things up. The 1.3930 holding support that level increases in importance and of course the highs at 1.3953 to 1.3958 (along with the 100 hour MA), define the top. Breaks of either should look to extend the days range to the next target levels. On the topside that would be the 1.3983 area and on the downside, a move toward 1.3911/14 would be a target.
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| USDJPY continues to have ceiling resistance at 90.90. Look for 90.20 support today Posted: 02 Feb 2010 05:53 AM PST
The USDJPY just could not break through the 90.90 level overnight and the failure has led to some selling pressure. The price has now dipped below the 90.55 level which has been another key technical level over the last few weeks (see chart above) and looks next to test key support at the 90.20 area. At that level is 100 and 200 hour moving average support (green and blue line in the chart above), trendline support off the hourly chart, and 100 day Moving average support. When there are multiple technical levels in play, it increases the levels importance for traders looking for a low risk entry point. The reason being, if the level gives way, the loss is limited. Conversely, if the level holds, it can often lead to a nice move back higher (in this case).
So be aware of the key level and look for buyers against the level with stops on a breach lower should the price dip further. |
| GBPUSD stuck in the range with choppy trading in between. Posted: 02 Feb 2010 05:42 AM PST
The GBPUSD randomly walked through the motions today with support holding and resistance holding but choppy action between the extremes. The price held the channel support line in the London morning session. Yesterday this channel line was breached but the price action below could not be sustained and the market rebounded. The level comes in at the 1.5896 level currently and this will certainly be used by buyers today on dips. On the topside, the highs from yesterday held the upside extreme today. Yesterdays high came in at 1.5977. The high today reached 1.5973. There have been 3 different tests of the level on the hourly chart over the last two days. On Friday, the price closed at 1.5982. This too is attracting sellers as the market consolidates. When these levels build up it often increases the importance as resistance but also on breaks. Be Aware.
In between the two extremes has been choppy with up and down trading (see 5 minute chart above). This has led to the 100 and 200 bar moving average on the 5 minute chart to converge above and below the days midpoint trading range. Range traders can pick a bias and use the midpoint or moving average line as trigger levels. Alternatively, being patient and buying dips or selling rallies with stops above the extremes can be used as well. |
| No 8:30 AM Economic releases due Posted: 02 Feb 2010 05:11 AM PST The US Pending Home Sales will be released at 10:00 AM. The expectation is for a gain of 1% vs a sharp -16% decline last month. This is a bounce back from November as a result of new home buyer credits. Recent housing data has been anything but robust as weather has played a negative roll in the numbers along with continuing foreclosure activity. |
| AUDUSD corrects higher off failure to extend the downside, but no cut has the currency pressured Posted: 02 Feb 2010 04:49 AM PST
The RBA surprised by not raising rates last night. This sent the AUDUSD sharply lower, erasing the gains from yesterday’s rally higher. The price is now correcting higher as the failure to extend the downside has led to some profit taking. Yesterday the low came in at 0.8787. The lows today came in at 0.8781 and 0.8780. Each time down, the pair found anxious profit taking buyers who pushed the price back up. Now the price is back up testing the 38.2% retracement of the days range at the 0.8836 level. Additional resistance comes in at 0.8846 which was the close from last week. Looking at the longer term chart the low from December 2010 came in at the 0.8733 level. This level will likely find buying interest as well as the market assesses the impact of the decision today. Below that is the the 0.8585 level which was a consolidation area going back to September. The 200 day moving average comes in at the 0.8536 level. All these levels come back in play with the rate decision today.
Despite the decision today, it is likely to be a pause in policy. However, with China looking to slow growth, this directly impacts the Australian economy and as a result a lower currency may be the consequence as the longs have had a good run since February of 2009. During that time the AUDUSD has risen from 0.6288 to 0.9405. So although the prospects are better for the country, a further correction lower is likely to occur. |
| EURUSD tests the 100 hour MA and finding some profit taking sellers Posted: 02 Feb 2010 04:28 AM PST
The EURUSD is testing the 100 hour MA as NY enters for the day. The level comes in at the 1.3954 level. The pair has risen off the low that tested the old channel trendline (see chart below) at the 1.3883 level. The grind highertoday is now finding the profit taking sellers now at the key moving average level. A break above would likely lead to renewed buying interest with 1.3983 the next target for the pair.
On the downside, look for price to find support at the 1.3930-35 area. The 38.2% of the days range comes in at 1.3930 and the 100 bar MA on the 5 minute chart is at the level as well. Stock futures are up in early trade but modestly. DJ Futures are up 20 -25 points and oil price are also up (+$0.75)
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| February 2, 2010 NY Opening Forex Commentary is available for viewing Posted: 02 Feb 2010 04:15 AM PST |
| Posted: 02 Feb 2010 02:03 AM PST Eurozone PPI came in slightly better than its 0.0% forecast at 0.1%, but it had little effect on the market as the EUR trades mid-range for the session at 1.3937. The market will now wait for pending home sales out of the U.S. and statements which will be made by Treasury Sec Geithner. |
| Posted: 01 Feb 2010 11:07 PM PST Retail Sales out of Germany fell just short of its 0.9% forecast, coming in at 0.8% as the EUR trades off of session highs of 1.3937. |
| Posted: 01 Feb 2010 11:05 PM PST The market had a muted reaction to Swiss consumer climate which came in at -7 versus the forecast -10 and prior reading of -14. |
| Aussie Keeps Rates Unchanged @ 3.75% Posted: 01 Feb 2010 07:49 PM PST The RBA surprisingly kept rates unchanged at 3.75%, when the street was expecting a 25 basis point hike. As a result the AUD/USD pair immediately fell a full figure, currently trading in the .8815 range. The weaker AUD should help the export driven Australian economy by weakening the AUD, however the AUD maintains an interest rate advantage against the majors. The RBA had the following accompanying comments:
On the chart below we see the AUD sell off following the rate decision as the pair moves toward the December lows @~.8733. Being resisted by the 100hr moving average since the middle of January.
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| Posted: 01 Feb 2010 06:25 PM PST The NAB Business Confidence came in significantly lower in December with a reading of 8 versus the prior reading of 19 and Business Conditions came in unchanged at 10. The AUD had no reaction to this release as it trades off session highs ahead of the RBA rate decision (expected to raise rates 25bps to 4%.) |
| Posted: 01 Feb 2010 01:30 PM PST |
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