Forex Market Updates & Commentary

---

• USDJPY consolidates after the sharp move higher yesterday
• Forex Morning Report - Feb 19th
• GBPUSD trying to bottom but not getting very far
• Feds Dudley on the wires
• CPI comes in at +0.2% and +0.1% ex food and energy. Canada Retail Sales about as expected.
• CPI due out at 8:30 AM. Canada Retail Sales also due for release.
• Rebroadcast of Feb 18th Online Trading Class
• EURUSD back above 1.3483 level. 1.3531/38 next upside resistance
• February 19th 2010 NY Opening Forex Commentary is available for viewing
• UK Retail Sales
• Fed’s Bullard and Lockhart Statements
• AUDUSD falls as well toward the 200 hour MA.
• USDJPY moves toward the 200 day MA resistance level
• EURUSD moves closer to the 61.8% longer term target level
• GBPUSD breaks below 1.5556 and 2010 low at 1.5533

USDJPY consolidates after the sharp move higher yesterday Posted: 19 Feb 2010 06:33 AM PST The USDJPY has been well behaved in trading today. The high for the day comes in at 92.08.  The low has come in at 91.61.  The 91.67 level has been more of a floor for the pair with a number of bars on the 5 minute chart at that level. Let’s call support at 91.61-67.  On the topside, the 100 and 200 bar MA on the 5 minute chart is at 91.83.  This will be the watched today.  As long as the price remains below the 91.83 the bias remains to the downside with support at 91.61/67.  A move below the 91.61/67 level will be needed to confirm the downward bias for today.  On the topside a move back above the 91.83 level could reestablish the upside for the USDJPY.  In which case a move to test the top at 91.08 and the all important 200 day MA at 91.30 would be the next upside target levels.

Forex Morning Report - Feb 19th Posted: 19 Feb 2010 06:30 AM PST Click here to view the embedded video.

GBPUSD trying to bottom but not getting very far Posted: 19 Feb 2010 05:48 AM PST The GBPUSD fell sharply overnight, but has slowed the declines pace.  This has allowed the 100 bar MA on the 5 minute chart to catch up with the market and the price is currently trading at the level.  The pair did move above the 100 bar MA off the 8:30 data, but remained below the 200 bar MA at the 1.5425 level currently. A move above this level is needed to solicit additional dip buying interest.   A move above would next target the 1.5459 level. Further up is the floor area prior to the last plunge down. That level comes in at the 1.5533-56.  This ultimately is the key topside resistance.

Feds Dudley on the wires Posted: 19 Feb 2010 05:43 AM PST Says Discount Rate change was a small technical change. Not a monetary policy decision. The Fed will still stay on hold for an extended period of time.

CPI comes in at +0.2% and +0.1% ex food and energy. Canada Retail Sales about as expected. Posted: 19 Feb 2010 05:30 AM PST Canada Retail come +0.4% vs +0.5 expectation.  Less Autos +0.4% vs +0.3% The USDCAD has come down after the data and is testing the 200 bar MA on the 5 minute chart at the 1.0491 level.  On the topside look for resistance at the 200 hour MA.  That level held earlier today and came off. The current level comes in at the 1.0529 level. A break above will next target the 1.0542 level and then 1.0588.

CPI due out at 8:30 AM. Canada Retail Sales also due for release. Posted: 19 Feb 2010 05:26 AM PST Expectations are for a rise of 0.3% vs +0.1% prior. The Ex Food and Energy component is expected to rise by 0.1% which is the same as the previous month.  The YoY is expected to come in at +2.8% for the headline figure and +1.8% for the ex Food and Energy.  The core inflation rate has been between 1.4% and 1.9% since December of 2008. Canada Retail Sales are expected to show a 0.5% gain for the month after falling by -0.3% last month. Ex Autos the expectation is for  a +0.3% gain after a 0.0% gain.

Rebroadcast of Feb 18th Online Trading Class Posted: 19 Feb 2010 05:24 AM PST The Rebroadcast of the Feb 18th 2010 FXDD Online Trading Class is now available at http://forex.fxdd.com/webinars

EURUSD back above 1.3483 level. 1.3531/38 next upside resistance Posted: 19 Feb 2010 05:10 AM PST The EURUSD moved below the target at the 1.3483 level which was the 61.8% of the move up from the 2009 low to the 2009 high.  The price is moving toward the 1.3531/38 level which was the lows from February 12 and yesterday prior to the move lower.  This will be the next resistance level for the pair this morning.  Above the level the pair has room to head up toward the 1.3575-85 where the 38.2% of the move down and the floor lows going back to February 5th. On the downside, support will continue to come in at the 1.3482 level.  A break below this level the low from the day at 1.3444 .  Below that, looking back at the last time the price was at this level, the price based off 1.3423 on May 18th.

February 19th 2010 NY Opening Forex Commentary is available for viewing Posted: 19 Feb 2010 04:42 AM PST Click here to view the embedded video.

UK Retail Sales Posted: 19 Feb 2010 01:38 AM PST UK Retail Sales m/m came in at -1.2%, weaker than the -0.5%. The prior reading of 0.3% was revised up to 0.5% Y/Y came in at 2.6%, stronger than the 1.1% expected. The prior reading of 2.1% was revised up to 2.9%. Initial market reaction was an abrupt sell off of GBP. Gbp/Usd made a new low of 1.5354 then snapped back to pre-number levels of 1.5385-90.

Fed’s Bullard and Lockhart Statements Posted: 18 Feb 2010 06:45 PM PST Speaking in Memphis, St. Louis Fed President Bullard made the following comments: “Everything” depends on data for exit strategy. Fed funds rate increase may be delayed until 2011. The view that rates will rise later this year is “overblown”. Improving economy will help commercial real estate. Mixing politics and policy leads to poor results. Pre-crisis fed had insufficient access to information. Inflation expectations are rising. Fed should have direct access to financial information. Labor markets are weak, “at best stabilizing”. “Economic recovery is on track”. “Housing sector is stabilizing”. Fed is keeping “close eye” on inflation expectations. Fed will carry out exit strategy “in right way”. Understands cause for market “nervousness” from budget deficit. Discount rate move unrelated to future of main rate. Stands by “extended period” language on rates. Discount rate move is “part of normalization process”.   The Fed’s Lockhart also made the following comments: Inflation expectations are ”quite well anchored” Fed is moving along briskly with “regulatory overhaul”. Doesn’t see asset sales as “early or first step”. Doesn’t want to “put a date” on “extended period”. Discount move doesn’t signal tightening.

AUDUSD falls as well toward the 200 hour MA. Posted: 18 Feb 2010 04:26 PM PST The AUDUSD has fallen on the back of the Fed Discount rate increase and stands between the Goal Posts as defined by the 100 hour MA and the 200 hour MA.   The 200 hour MA comes in at the 0.8872 now and should be initial profit taking support. The low has reached 0.8887 so far .  The 100 hour MA was broken at the 0 .8952 level and this should now keep the rallies contained.       Although the Fed was cautious and said the action was not a tightening of consumer/business rates, the implication by the market will be that it is another step toward tightening.   Although the RBA is expected to tighten further a Fed tightening should balance out that and keep the AUDUSD under wraps.  The pair did go and test the 200 day moving average in early February reaching a low of 0.8577 vs the 200 day MA at 0.8560.  The pair may start to wander back toward this key moving average again.  If China tightens more or comes under pressure to raise the value of the Yuan, it may slow their growth more and in turn lead to a weaker AUDUSD. Of course we will look to follow the technicals and with the price back below the 100 hour MA at the 0.8952 level, the downside will be further explored.  Look for sellers against this key level.

USDJPY moves toward the 200 day MA resistance level Posted: 18 Feb 2010 03:09 PM PST The level comes in at the 92.30 level.  Look for profit taking sellers against the level with stops on a break above next targeting the high from December and January at the 93.14 and 93.77 levels respectively.  On the downside, look for buyers at 91.64.  A move back below the 91.41 level will not be welcomed by the USDJPY bulls.

EURUSD moves closer to the 61.8% longer term target level Posted: 18 Feb 2010 02:18 PM PST The EURUSD has moved down to test the 61.8% retracement level at 1.3483.  The low reached 1.3485.  With the negative bias, the balance may be tipped to the downside but the holding of the level could solicit a short covering bid of some sort.  However please note a break of the key support level should solicit additional selling momentum. SO be aware. On the topside look for resistance at the 1.3531/37 level now. The bears, who are in control would likely look to sell against this area. The low on May 18th 2009 at 1.3423 becomes a target on the break.

GBPUSD breaks below 1.5556 and 2010 low at 1.5533 Posted: 18 Feb 2010 02:10 PM PST The last time the market was at these levels was in May 2009. During that time the low consolidation period extended from 1.5448 to 1.5515 before moving higher.   Longer term, the GBPUSD will next target 1.5272 where the 50% of the 2009 low to high range comes in.  ON the topside, the 1.5533 level and 1.5556 will of course be levels to watch.   A break back above these low levels will not be welcomed by the GBPUSD bears who are looking for the momentum to the downside to continue.  A move above will likely solicit some short covering buying on the move back higher.

You are subscribed to email updates from Forex News and Commentary by FXDD To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610