Thursday, March 11, 2010

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

USD/CAD pushes hard into the Goalposts

Posted: 11 Mar 2010 06:44 AM PST

march11_cad1-1

A burst of activity in the USD/CAD has pushed the pair hard up into the Goalposts, causing the pair to surge above the 100 hour MA (blue line) all the way to 1.0315 (200 Hour MA, green line) as seen in the 1 Hour chart.

march11_cad1-2

Moving to the 5 Min chart the pair has backed down to the 38.2% retracement as the market prepares for its next move. The pair will at least need to break and hold above the 200 Hour moving average at 1.0315 to give signs of a continued move higher. The next target on the upside is the 38.2% level as seen on the 1 Hour chart at 1.0391. If the pair fails to move higher, a move lower would put the pair into support at the 100 Hour MA at 1.0271.

Forex Morning Report - March 11

Posted: 11 Mar 2010 06:15 AM PST

Trade Balance better at 37.3 billion

Posted: 11 Mar 2010 05:33 AM PST

Imports fall on oil and automobiles (-1.7%) Exports fall -0.3% as well. 

Initial Clams come in at 462K . As expected.

Canda Capacity Utilization is stronger at 70.9 while the Trade Surplus is higher at 0.8Billon C$.  House prices rise 0.4% as expected.

EURUSD bounced off the 100 hour today. Gives hope for the bulls.

Posted: 11 Mar 2010 05:24 AM PST

gregmike-00816

Overnight the EURUSD bounced off the 100 hour MA at the 1.3618 ( the low reached 1.3621). The level also corresponds to the 38.2% retracement of the low to high range that has prevailed over the last 3 weeks  which adds to the significance.  The key level on the topside remains at 1.3691. A break above this level should solicit additional buying interest.  Conversely, a move back below the 1.3621 should solicit selling interest. 

Looking at the 5 minute chart the bias is also positive with the price above the 100 and 200 bar MA at the 1.3649 and 1.3645 levels respectively.   IF the price can stay above  these levels intraday the bias would remain positive.

The market continues to be contained in the three week (plus) range, but  the longer it goes on, the closer we get to a break out. Longer term the price on daily chart has tested the bottom 4 times and each time it has bounced.  A 38.2% correction off these lows still targets the 1.3852-73 area. This would be a modest correction for the pair.   Finding support at the 100 hour MA keeps the spirit of that move alive today. Confirmation would come with a break of the 1.3691 level.  The high for the last three weeks at 1.3735 would be the next hurdle of course, but it is surmountable. 

gregmike-00815

Bobbys Corner-Open Market-March.11.2010

Posted: 11 Mar 2010 05:18 AM PST

bob-slade-forex-2-150x200Good Morning:

The EUR/USD pair was little changed in the overnight session.  Very narrow range bound trading with no clear direction evident.
GBP had a good day as it jumped over the 1.50 mark versus the USD, and rose across the board.

Greek unions protested against the government’s budget cuts and closed hospitals,airports, and schools.  Workers walked off their jobs to protest the 4.8 Bil Euro budget cuts.  These measures will include wage cuts and tax increases.  These drastic measures are necessary to get Greece out of the worst sovereign debt crisis to hit the European marketplace.

In China,  retail sales jumped over 20%, and industrial production also rose higher than expected.  The Chinese economy is racing forward after last years fiscal stimulus packages.  The economy is not only export focused, but has been pushing hard for domestic demand in the past 12 months.

World equity markets were mixed-and US Futures are mostly flat at this time.

Oil:$82.05                                           Gold:$1106.40

TIME FOR  EST PRIOR
8:30A.M. TRADE BALANCE  JAN. -$41.0B -$40.2B
8:30A.M. INITIAL JOBLESS CLAIMS 6-Mar 460K 469K
8:30A.M. CONTINUING CLAIMS 27-Feb. 4498K 4500K

HAVE A GREAT DAY & GOOD LUCK

SNB keeps rates unchanged. Will act to prevent “excessive” franc appreciation

Posted: 11 Mar 2010 05:05 AM PST

Says will act decisively to prevent “excessive” franc appreciation.

The question is, what level is excessive.  The market may look to probe where that is and start to use the 1.4630 level as resistance now.

Other comments include:

Swiss recovery remains fragile. Price stability is not a threat but deflation can not be ruled out. They see significant risk on global outlook, citing bleak budget outlook among global threats.  They see no discernable tightening of lending for 2 quarters.

For the Monetary Policy full release see:

http://www.snb.ch/en/mmr/reference/pre_20100311/source/pre_20100311.en.pdf

The March 11th 2010 NY Opening Forex Commentary is available for viewing

Posted: 11 Mar 2010 04:49 AM PST

SNB at 8:00 AM. US and Canada Trade data due at 8:30

Posted: 11 Mar 2010 04:48 AM PST

The SNB will announce their interest rate decision at 8:00 AM. The expectation is for unchanged rates. What will be of interest is if they change the wording on the value of the Swiss Franc.  Will they keep the wording the same at “it would prevent an ‘excessive’ rise in the franc” . The EURCHF is down at 1.4600 level - testing the SNB to address the currency in the comments.  The EURCHF had been using 1.4630 as the floor previously.  If they keep the language look for a further bias to the downside for EURCHF and possibly USDCHF.  The central bank is concerned about too strong a currency being deflationary but if global growth is rebounding,  it may be ok at this moment.  If they keep the language, look for 1.4630 to cap the topside for the EURCHF. The bottom will be explored to see how low it can go.

tb

At 8:30 the US Trade Deficit will be released. The expectation is for a $41.0 billion gap versus $40.2B last month.  The Trade Deficit has been getting larger again. This is a drain on GDP growth (the inflation adjusted Trade Balance is the one that is used for GDP).   A larger deficit should lead to a weaker dollar.

claim

Also at 8:30 will be the weekly Unemployment Claims. The expectations for Claims is for a slight fall to 460 K from 469 K.  Continuing Claims are expected to come in at 4500K unchanged from last week.   The employment picture has stabilized from an Initial Claims standpoint over the last month or so. Some suggest it may be weather related.  If so, we should start to see the thaw soon.

Canada will release their Trade Balance with a 0.2B surplus expected after a -0.2B deficit last month.  They also release Capacity Utilization which is expected to rise to 70.0% from 67.5%.  The New Housing Price index is expected to show a 0.4% rise, the same as last months rise.

Gbp/Usd trades above 1.5025-30 resistance

Posted: 11 Mar 2010 03:11 AM PST

Gbp/Usd has broken above the 1.5025-30 level where its 100 & 200 hour M/A’s lie. As stated in an earlier post the pair swiftly traded up to 1.5065-70 area where it met more resistance in the form of the 61.8% fibo at 1.5070. The longer the pair stays above 1.5030 the better chance we have of a breakout to the upside.

vincent_fx00015

Sterling tests key hourly resistance

Posted: 11 Mar 2010 02:31 AM PST

Gbp/Usd is trading  just beneath its 100 and 200 hour M/A (1.5026 & 1.5025 respectively). Also the 50% Fibo of the move down starting on March 8th lies at 1.5032. This area should be a strong level of resistance and a break above could bring the pair up to 1.5070. If it holds a move back down to 1.4960-70 level is likely.

vincent_fx00014

UK Consumer Inflation Expectations

Posted: 11 Mar 2010 01:40 AM PST

The GBP gained mildly against the USD after the release of a slightly better than expected consumer inflation expectation which read 2.5% versus its prior reading of 2.4%.

ECB Monthly Bulletin

Posted: 11 Mar 2010 01:07 AM PST

The following are statements released from the ECB’s monthly bulletin:

  • Euro zone recovery has begun, but likely to be uneven.
  • ECB believes risks are broadly balanced with persistent uncertainty.
  • They will continue progressive ending of exceptional support measures.
  • Abundant liquidity will be absorbed when the time is right.
  • ECb says recovery remains on track.

3-11 Economic Calendar

Posted: 10 Mar 2010 08:26 PM PST

region_forex_00038

China’s Industrial Production Weaker YoY

Posted: 10 Mar 2010 06:29 PM PST

China’s Industrial Production for February came in significantly weaker year over year at +12.8% versus the expectation of +19%, although the YTD release was marginally firmer than expected (20.7% vs. 19.5%.) Producer Prices were also higher than expected, all of which has helped the USD continue its bid this Asian session. On the EUR/USD chart below we see the negative bias against the Euro gradually continue to give the pair lower highs. We will look to see if the trendline resistance shown below can once again hold the pair and whether the mid 1.34 figure will keep on supporting the pair, a break either way could provide a new short-term dynamic for the pair.

eurusd

Aussie Unemployment Reprt

Posted: 10 Mar 2010 04:40 PM PST

The February Australian Unemployment Report came out worse than expected, sending the risk pairs toward session lows. The economywas expected to grow by 15,000 new employees, but February’s job growth expanded by only 400. The employment rate came in as expected at 5.3%. The AUD immediately dropped on the release, however finding support again on the trendlne we reviewed yesterday.

audusd1
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