Forex Market Updates & Commentary

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• EURUSD falls through target level at 1.3613
• Pending Home Sales fall sharply
• Forex Morning Report - March 4
• EURUSD falls below 1.3654. Watching the level short term.
• Trichet comments on Greece.
• USDJPY moves sharply higher to test the 100 hour MA
• ECB Trichet speaking. Highlights of comments below
• Initial Claims as expected.Continuing Claims fall sharply though
• EURUSD awaits Trichet with eye on Greece.
• Bobbys Corner-Open Market-March.4.2010
• No change ECB. Trichet eyed at 8:30 AM
• No change in BOE has the GBPUSD higher. Testing resistance
• The March 4th 2010 NY Opening Forex Commentary is available for viewing
• Initial Claims due at 8:30 AM, ECB Press Conference
• UK Bank Rate

EURUSD falls through target level at 1.3613 Posted: 04 Mar 2010 07:15 AM PST Equals 100 hour MA and 50% of  the Feb 17th to March 2nd low. Upside resistance now at the level and above that at the 1.3625-33. Next target is 1.3584

Pending Home Sales fall sharply Posted: 04 Mar 2010 07:02 AM PST Fall 7.6% in January, up 12.3% from a year ago.  Likely to do to severe weather but still a concern. Factory Orders up 1.7% vs 1.8% expectations. The prior month was revised higher to 1.5% from 1%.  One weak and one strong.

Forex Morning Report - March 4 Posted: 04 Mar 2010 06:30 AM PST Click here to view the embedded video. Next Online Trading Class today at 4pm

EURUSD falls below 1.3654. Watching the level short term. Posted: 04 Mar 2010 06:19 AM PST The 1.3654 has been a level the market has been using as support/resistance for the EURUSD.  The Market has moved below the level today and will be watched now for resistance. The low for the day comes in at 1.3533. This is a downside target. Below that  the 50% of the two week range along with the 100 hour MA come in at the 1.3613  level. Topside resistance comes in at the 1.3666  and 1.3680 now intraday.  Key level above comes in at 1.3691

Trichet comments on Greece. Posted: 04 Mar 2010 06:15 AM PST  GREECE LEAVING EURO IS `ABSURD’  GREECE SHOWING `STRONG COMMITMENT’ TO FISCAL TARGETS  ECB WELCOMES NEW GREEK CONSOLIDATION MEASURES

USDJPY moves sharply higher to test the 100 hour MA Posted: 04 Mar 2010 05:54 AM PST The USDJPY has moved sharply higher after breaking above trendline resistance at the 88.48 level.  The price is testing the low from Feb 26th which was the bottom of the consolidation phase which gripped the market from Feb 25th to yesterday’s break lower.  A move above will run into 100 hour MA resistance at the 88.89 level currently. The price has remained below the 100 hour MA since February 23rd when it broke at  91.20. The BOJ announced an increase in reserves for currency intervention today which warns the market that a sharp fall in the USDJPY may lead to some interbank intervention. Watch the 100 hour MA for clues. A move above will next target 89.45 area where the market had a ceiling and where the 200 hour MA is moving towards.

ECB Trichet speaking. Highlights of comments below Posted: 04 Mar 2010 05:37 AM PST ECB Rates are appropriate Recovery on track Economy to grow at moderate pace. Low inflaton will boost purchasing power To return to auction in regular 3 month Refinancings (phasing out of special conditions) Will monitor all conditions. Economy has benefited from global recovery and stimulus benefits Will remove liquidity as needed to avoid inflation. 2010 gdp 0.4% to 1.2% vs 0.1% and 1.5% previously 2011 GDP 0.5% to 2.5% YoY. Downside risk oil and protectionism. Medium term inflation is well anchored. 2010 inflation forecast 0.8% to 1.6% vs 0.9% to 1.7% prior 2011 inflation 0.9% to 2.1% vs previous 0.8% to 2%. The inflation estimates inc. Taxes, oil estimates. Private sector loans weak and will likely remain weak Banks reducing balance sheet sizes High level of deb put burden on money policy Govt must take determined efforts on deficits Focus on spending reforms is needed to keep debt in check. ALL GOVT MUST MEET STABILITY PACT AGREEMENTS

Initial Claims as expected.Continuing Claims fall sharply though Posted: 04 Mar 2010 05:34 AM PST The Initial Claims came in at 469K vs a revised 498K (was 496k). The Continuing Claims fell to 4500K vs 4600 K expected. This is much better. Non Farm Productivity rose to 6.9% but at the expense of lower Unit Labor Costs of -5.9% (vs -4.5% originally reported).  This is good news bad news as workers suffer. In Canada Building Permits fell sharply -4.9% vs estimate of +0.8% gain.

EURUSD awaits Trichet with eye on Greece. Posted: 04 Mar 2010 05:27 AM PST The Greek government is launching a bond today totaling 5 billion Euros. This is just the beginning of the process and so they are not out of the woods by any measure. The Greek government announced an austerity package yesterday which totalled about $6.4 billion of additional debt reduction plans. The implementation is key, as is this debt issue and EU support (verbally or otherwise). It is estimated that Greek will need to issue $72 billion of debt this year (53 billion euros). The 5 billion euros today is just the start and it does not come without a cost. The rate is likely to be 6.4%.  The EURUSD is down on the day today. Yesterday the price rose above the previous consolidation ceiling at the 1.3691 level. The current price is back below this key level which puts into question the viability of the upside momentum from the last few days.  Watch this level today  for clues (i.e. after Trichet).  I would expect sellers against it with stops on a move back above the level.   A move above will be needed to keep the upside momentum going. ON the downside, the price is now moving below the 100 bar MA on the 5 minute chart at the 1.3668 level.  There is suppport at the 1.3654 level and below that a move toward the 1.3613 level can not be ruled out (Midpoint of the move down from Feb 16 and 100 hour MA level which is the blue line in the chart above - see hourly chart above).  Addittonal support comes in at 1.3621 (38.2% of the move up from March 2nd low to the high).  So profit takers are likely to slow a move down at this area.   A break below however, will not be welcomed and could signal the new move back down for the pair.

Bobbys Corner-Open Market-March.4.2010 Posted: 04 Mar 2010 05:25 AM PST Good Morning: Both the BOE kept interest rates steady.  BOE did not expand it’s asset purchasing program which was expected. The ECB also left interst rates unchanged-and will have a conference call at 8:30 AM. Greece began selling 10 year bonds today-pricing them with a yield of 6.39% vs.6.1% on their current bonds. Greece’s prime Minister has promised to reduce their budget deficit by cutting spending and wages.  Today protesters occupied the finance ministry as a protest against the new proposals. World equity markets were mostly lower-and US Futures are slightly higher this morning. Oil:$80.76                                             Gold:$1138.40 Today’s Data:   8:30A.M. ECB PRESS CONFERENCE  8:30A.M. NONFARM PRODUCTIVITY 4Q F 6.30% 6.20% 8:30A.M. UNIT LABOR COSTS 4Q F -4.50% -4.40% 8:30A.M. INITIAL JOBLESS CLAIMS 27-Feb       470K     496K 8:30A.M. CONTINUING CLAIMS 20-Feb    4600K     4617K 10:00A.M. FACTORY ORDERS   JAN.    1.80% 1.00% 10:00A.M. PENDING HOME SALES MoM   JAN 1.00% 1.00% 10:00A.M. PENDING HOME SALES YoY     JAN. 10.50% 10:30A.M. ICSC CHAIN STORE SALES YoY         FEB. 3.00% HAVE A GREAT DAY & GOOD LUCK

No change ECB. Trichet eyed at 8:30 AM Posted: 04 Mar 2010 04:55 AM PST As expected. Comments on Greece are eyed.

No change in BOE has the GBPUSD higher. Testing resistance Posted: 04 Mar 2010 04:51 AM PST As expected the BOE kept rates unchange and announced no change in QE measures. This has the GBPUSD moving higher in early NY trade.  Overnight the pair corrected off the 2 day move higher and dipped back below the 100 hour MA currently at the 1.5054 level. The move lower corrected 38.2% of the move up over that time period and this was enough to get the pair moving back to the upside (see chart below).  On the 5 minute chart below, the pirce is back above the 100 and 200 bar MA at the 1.5067 and 1.5079 levels respectively. This is positive for the pair as the day starts. However, a move above the back side trendline is needed to propel the pair higher.   1.5129 was the high from yesterday. On the upside a break of the 1.5114 area has the high from yesterday to contend with at the 1.5129 level. Above that the 1.5176 level is the 38.2% of the move down from the February 17th level.   Above that level is the 200 hour MA at the 1.5227.  If the 1.5114 area can not be broken an move back down toward the 100 and 200 bar MA on the 5 minute chart would be the downside target.

The March 4th 2010 NY Opening Forex Commentary is available for viewing Posted: 04 Mar 2010 04:33 AM PST Click here to view the embedded video.

Initial Claims due at 8:30 AM, ECB Press Conference Posted: 04 Mar 2010 04:29 AM PST Initial Claims are due at 8:30 AM with the expectations at 470K vs 496K last week. This has been inching up rather than down over the last few weeks.  The Continuing Claims are due at 830 as well with 4600K expected versus 4617K last week.  Also due at 8:30 is US Non Farm Productivity for the 4th quarter with expectations fo a 6.3% gain. This is a revision of a previously released 6.2% gain. Unit Labor costs are expected to show a decline of -4.5%.  Factory Orders for January are expected to show a 1.8% gain after a 1% gain in December and Pending Home sales are expected to show a 1% gain for the month for January. The ECB will make their interest rate announcement at 7:45 with no rate change expected and ECB Trichet will speak at 830 AM.  Support for Greece from Trichet should be supportive to the EURUSD. In Canada Building Permits for Jan will be released with expectations of 0.8% gain vs 2.4% gain in Dec.   This will be released at 8:30 AM.  At 10:00 AM the Ivey Purchasing Managers index is expected to rebound to 56.0 from 50.8 last month. The index reached a peak of 61.2 in October but has drifted back down in recent months.

UK Bank Rate Posted: 04 Mar 2010 04:03 AM PST As expected, the Bank of England held the UK interest rate at 0.5%. Additionally, the asset purchase facility is 200B; in line with the forecast and prior reading. The Bank of England made no statements after the policy decision.

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