Forex Market Updates & Commentary |  |
- Factory Orders rise 1.0% better than 0.5% forcast. Ivey worse but above 50.0
- USDCAD racing higher away from converged 100 and 200 hour MAs
- FXDD Forex Morning Report - Feb 4
- EURUSD looks toward support at 1.3800
- ECB Trichet Key Comments
- Intial Claims worse than expectations at 480K. Productivity comes at the expense of workers
- Initial Claims due out at 8:30 along with Quarterly Productivity
- EURUSD consolidating at lower levels prior to ECB Rate decision
- ECB keeps rates unchanged.
- The FXDD NY Opening Forex Commentary is available for viewing
- GBPUSD moves higher on the BOE decision
- UK Bank Rate left unchanged
- German Factory Orders
- UK Halifax HPI
| Factory Orders rise 1.0% better than 0.5% forcast. Ivey worse but above 50.0 Posted: 04 Feb 2010 07:03 AM PST Factory orders for December rose by 1.0% for the month which was above the concensus estimate of 0.5%. Durable Goods was revised up to 1.0% from 0.3% as reported on January 28th. Overall, a better report. Meanwhile the Ivey Purchasing Managers index came in at 50.8 vs estimate of 53.0. |
| USDCAD racing higher away from converged 100 and 200 hour MAs Posted: 04 Feb 2010 06:45 AM PST
The 100 and 200 bar MA on the 1 hour chart converged with the price earlier today and when this happens normally the market looks to move away. We call it “Three’s a Crowd” at FXDD and the idea is the market is in perfect harmony at that point, and therefore is time to create a disharmonious situation. This manifests itself in a move higher or lower. The market has chosen the upside. Normally, the move will extend for a period of time that is more than the current hourly bar. So I do expect that we should see further extension. The high from the week at the 1.0720 would be a target of course. On the downside, I would expect that support at the 1.0640-1.0645 level where the market initially paused should hold. A move below this area would not support our requirements for a trend type move. But until then, the bias is up for the pair.
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| FXDD Forex Morning Report - Feb 4 Posted: 04 Feb 2010 06:30 AM PST |
| EURUSD looks toward support at 1.3800 Posted: 04 Feb 2010 06:19 AM PST
The 1.3800 level is 50% retracement support as well as a nice big figure number. This level is should find buyers against it with stops on a move below. On the topside now, the 100 bar MA on the 5 minute chart comes in at 1.3850 and moving lower. This moving average will be watched retracements. Before that level however, clues may come from the 1.3826 level which was the low earlier today and the high correction price on the last move higher (see chart below).
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| Posted: 04 Feb 2010 05:38 AM PST
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| Intial Claims worse than expectations at 480K. Productivity comes at the expense of workers Posted: 04 Feb 2010 05:35 AM PST The expectation was for 455K. The Continueing Claims rose to 4602K from 4581K. The Non Farm Productivity rose by 6.2%, a little less than 6.5% and the Unit Labor costs fell -4.4% vs 3.5%. Overall, the Initial Claims certainly don’t point to a good number this month. However, the positive for this months employment is last months number was effected by weather issues which was thought to have kept the number lower by -100K jobs. A bounce back might be warranted but it is unlikely to stir the Fed (or worry the Fed) into thinking about tightening any time soon. In the past recoveries it was not until NFP increased by 200K to 250K on average for 3 months before tightening. We are not near that currently. The expectation is for a gain of 10-15K. The unemployment rate is expected to stay at 10%. The change in Manufacturing is expected to take an additional -20K. This would be the 26th consecutive month of job losses and 42nd decline in the last 43 months. Unbelievable. |
| Initial Claims due out at 8:30 along with Quarterly Productivity Posted: 04 Feb 2010 05:23 AM PST The Initial Claims are expected to fall to 455K from 470K last week. Continuing Claims are expected to fall to 4581K from 4602K. This is the last piece of employment data prior to the Feb Employment report due out tomorrow. Over the last month the Initial Claims have risen from 432K to 470K last week. So although the numbers are down from the peaks at 674K last year, the number still remains high from historical standards. Also at 8:30 Non Farm Productivity is expected to rise by 6.5% Q/Q which is on the back of 8.1% and 6.9% in the last two quarters. This increase comes at the expense of the Unit Labor Costs falling -3.5%. The good news is it is good news for corporate profits. The bad news is it is at the expense of the worker earnings. Last quarter Unit Labor costs fell -2.5%. |
| EURUSD consolidating at lower levels prior to ECB Rate decision Posted: 04 Feb 2010 05:07 AM PST The price stepped down once again today falling below the 2010 low for the recent move lower at 1.3852 with the low reaching 1.3826. Off the daily chart the 50% retracement of the move up in 2009 comes in at 1.3800. Keep this level in mind on the downside today. The EURUSD continues to step down. The pair has now trended down from the January high of 1.4579 to the low today of 1.3826.
During the move down, the pair has only had one test of the 200 hour MA. That occurred yesterday, but was reversed hard - falling back below the 100 hour moving average in the process. The 100 hour MA comes in today at 1.3919 currently (blue line in the chart below). The close from yesterday was at 1.3893. These levels should be watched through the ECB decision as possible resistance/profit taking levels. A move above the 1.3919 turns that bias back to the upside.
Looking at the shorter term chart the 100 bar moving average on the 5 minute chart comes in at the 1.3859 level and the 200 bar MA on the same chart comes in at the 1.3875 level. A move above the 100 bar MA turns the bias positive intraday, and should next lead to a test of the 200 bar MA. A move above that level should confirm the bullish bias and lead to further upside corrective pressure with the close from yesterday the next target. On the downside, the low for the day at 1.3826 leads to a test of the 1.3800 level. A break below there, next targets 1.3755.
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| Posted: 04 Feb 2010 04:45 AM PST Trichet to speak at 8:30 AM. |
| The FXDD NY Opening Forex Commentary is available for viewing Posted: 04 Feb 2010 04:37 AM PST |
| GBPUSD moves higher on the BOE decision Posted: 04 Feb 2010 04:36 AM PST
When the BOE said they would not extend the Asset Purchase plan past 200 billion (at least for now), the price of GBPUSD moved sharply higer. The low last night reached the low just prior to the announcement at 1.5804. The high has been contained so far at by the 100 bar MA on the 5 minute chart at the 1.5872 level (at least for now). A move above this level will look to the 200 bar MA at the 1.5887. The close from yesterday also comes in at 1.5889. A break to positive territory would push toward 1.5905. |
| Posted: 04 Feb 2010 04:01 AM PST The MPC has decided that the official bank rate in the United Kingdom will remain unchanged at 0.50%; upon this release the GBP/USD jumped up 60 points. The BOE also noted that credit conditions will likely to remain restrictive. They will pause the asset purchase program at 200b but could start up again at any time given economic conditions. They noted that inflation has risen sharply above target. |
| Posted: 04 Feb 2010 03:03 AM PST The market was not phased by German factory orders m/m which came in much worse than forecasted at -2.3% with a survey of 0.2% and prior reading of 2.8%. |
| Posted: 04 Feb 2010 01:04 AM PST The Halifax HPI out of the UK came in worse than expected at 0.6% against the forecast of 0.9% and prior showing of 1.0%. Upon the initial release of the data sterling lost 15 points against the USD, but has regained most of the move upon further reading. |
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