Forex Market Updates & Commentary

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• Forex Morning Report - March 17
• USDJPY trying to move higher off the BOJ liquidity addition. 90.33 support.
• PPI lower than expected, but better Canada data again.
• Rebroadcast of March 16th Online Trading Class
• EURUSD extends the top and comes back off
• Bobbys Corner-Open Market-March.17.2010
• GBPUSD moves higher on better employment data
• The March 17th 2010 NY Opening Forex Commentary is available for viewing
• Gbp/Usd threatening to break Feb. 26 high
• MPC Meeting Minutes
• Buba President Weber Speaks
• UK Unemployment Rate
• BOJ’s Shirakawa on the wires…
• 3-17 Economic Calendar
• Japanese Overnight Call Rate

Forex Morning Report - March 17 Posted: 17 Mar 2010 06:30 AM PDT Click here to view the embedded video.

USDJPY trying to move higher off the BOJ liquidity addition. 90.33 support. Posted: 17 Mar 2010 06:17 AM PDT The BOJ added liquidity to the market today in an attempt to keep the engines of the economy going and the USDJPY continued to remain above the 100 day MA at the 90.09 level but the price has not been able to extend above the 90.72 level.  The 100 hour MA is moving sideways at 90.50 and the 200 hour MA is moving up toward the same level at 90.33.  The consolidation may continue but at some point soon, the market may look to make a break.  Looking at the longer term chart if the price can continue to remain above the 100 day MA at the 90.09 currently, the target would continue to be the 200 day MA at the 91.75 level (green line in the chart below).  Watch the 100 hour and 200 hour MA below today to keep the bullish bias for the short term today (at 90.33 and 90.50) .  IF those levels hold a move above the 90.72 would be the next bullish upside target for the pair with a break above paving the way for higher momentum.

PPI lower than expected, but better Canada data again. Posted: 17 Mar 2010 05:33 AM PDT CPI Headline: -0.6% vs -0.2% Ex Food and Energy +0.1% which was as expected. YoY 4.4% vs 4.9% expected YoY Ex Food and Energy a small 1.0% which is as expected. The Fed is not concerned about inflation. Capacity is still low and this is not the environment for increasing prices on any level. Meanwhile the Canadian Wholesale Sales rose by a greater than expected 3% vs 0.5% increase (fastest pace in 3 years) .  The level of inventories also declined by 1.1% which brings the inventory to sales ration down to 1.19 frm 1.24.  This also suggests further growth down the road as inventories are replenished. The USDCAD has support below at 1.0100 area.  A break looks toward 1.0077 and below that the lure of the 1.0000 should take hold.

Rebroadcast of March 16th Online Trading Class Posted: 17 Mar 2010 05:29 AM PDT MARCH 16 2010 FXDD Online Training -Click Here to view Greg Michalowski teaches a strategy session on how to view the Forex market at face value.

EURUSD extends the top and comes back off Posted: 17 Mar 2010 05:24 AM PDT The EURUSD inched to a new move high reaching 1.3817. Since then the price has moved back lower and the pair stands below the close from yesterday at the 1.3775.  The price is also now below the 100 and 200 bar MA on the 5 minute chart at the 1,3776 and 1.3784 levels respectively.  On the downside support next comes out at 1.3750 and 1.3729. These levels are the 38.2% and 50% of the weeks low to high trading range.  The 100 hour MA comes in at the 1.3720. This level should also support. A move above the 1.3784 level is needed to excite bulls from this point.   It is not like the EURUSD is all that bullish but it is more that some of the bearishness from Greece, etc has lessened (S&P take off watch yesterday as an example). The longer term resistance at 1.3852-73 remains a target to the upside, but the shorter term technicals must support.  IF they show lack of momentum, then we get the corrections that move the pair back lower, creating the big stair step moves.  In these instances, the 5 minute charts and moving averages and old highs/lows become levels to lean against and use as profit taking points.  Patience, good trade location and not over trading are the keys in these types of markets until that time, when the market can shake itself out of the slump.

Bobbys Corner-Open Market-March.17.2010 Posted: 17 Mar 2010 05:18 AM PDT Good Morning: The USD and JPY fell in overnight trading.  Both the BOJ and FED made comments to keep interest rates at near zero to keep their economies from falling back into recession.  Investors moved their money to the equity markets and higher-yielding currencies. The GBP is recovering, as data released this morning shows that U.K. residents receiving unemployment benefits dropped.  The GBP has lost steam since 2010 started as concerns that the U.K. will not get a majority in parliamentary elections this spring.   This majority will be needed to address their budget deficit, and to propose additional measures to shore up their economy. World equity markets are higher, and US Futures are pointing to a higher opening this morning. Commodities are also higher this morning. Oil:$80.79                                 Gold:$1129.40   7:00a.m. MBA Mortgage Applications 12-Mar 0.50% 8:30a.m. PPI MoM FEB. -0.20% 1.40% 8:30a.m. PPI EX FOOD & ENERGY MoM FEB. 0.10% 0.30% 8:30a.m. PPI YoY FEB. 4.90% 4.60% 8:30a.m. PPI EX FOOD & ENERGY & ENERGY YoY FEB. 1.00% 1.00% HAVE A GREAT DAY &  GOOD LUCK

GBPUSD moves higher on better employment data Posted: 17 Mar 2010 04:51 AM PDT The better than expected jobs data out of the UK (Claimant Count down  32.3K, Unemployment rate 7.8% vs 7.9%), has propeled the GBPUSD higher this morning. The price has extended to a high of 1.5380. Off the daily chart the next target comes in at the 1.5421 level which is the 38.2% retracement of the move down from the January high of1.6456 to the low reached at 1.4782.  WIth the price up at these levels as NY enters the fray, the 1.5314 is the 38.2% retracement support of the days trading range.  The 1.5294 level will also be a support level today.  The low correction price after the initial surge higher came down to a low of 1.5297 and the midpoint of the days range comes in at 1.5294.

The March 17th 2010 NY Opening Forex Commentary is available for viewing Posted: 17 Mar 2010 04:28 AM PDT Click here to view the embedded video.

Gbp/Usd threatening to break Feb. 26 high Posted: 17 Mar 2010 03:00 AM PDT On the strength of better than expected jobless claims change the GBP/USD has escalted to a high of 1.5335, exceeding Feb. 26 high of  1.5322. In the short term iI would expect a slight correction , possibly down to 1.5300 with the pair still in a bullish mode. If the pair can break clean above 1.5322 (close above) from a daily perspective, this would be further confirmation of a bullish outlook for sterling. The next stop for the pair should be 1.5500.

MPC Meeting Minutes Posted: 17 Mar 2010 02:59 AM PDT The following are statements from the Monetary Policy Committees’s meeting from two weeks ago: Increasingly likely that CPI will remain well above 2% target over coming months. If recent sterling fall persists it is likely to put extra upward pressure on CPI in coming quarters. The timing of impact of monetary stimulus remains uncertain. BOE MPC voted 9-0 in favor of leaving rates at 0.5%. Some MPC members thought the upside CPI risks had risen, others felt the balance of risks were not changed.

Buba President Weber Speaks Posted: 17 Mar 2010 02:57 AM PDT Participating in a panel discussion titles “The Aftermath of the Crisis- A Newly Structured World”, Bundesbank President Axel Weber made the following comments: We could go in the same direction as the Volcker plan on the issue of proprietary trading. Overall net results for systemic banks in Germany are likely to be negative this year. Compensation of top managers is an issue that is outside the regulation sphere. Changes in rating agencies rules a step in the right direction, we are not fully there yet. We have to move away from having regulatory framework that is solely based on rating agencies. As a central bank, we probably have to be even more dynamic with haircut procedures. The argument for higher inflation totally neglects that we never had a problem moving interest rates at zero bound. There is nothing worse than high levels of inflation; price stability is key. We should help Greece help itself; measures put forward are credible. We need more credible and stringent rules on deficits. We should not be too inventive in inventing new tools to tackle problems.

UK Unemployment Rate Posted: 17 Mar 2010 02:39 AM PDT The GBP caught a bid after claimant count change came in at -32.3k for February; much better than its 8.2k forecast and 23.5k prior reading. This was the largest fall since November of 1997.  Also, the UK unemployment rate for February was 7.8%; unchanged from the prior month and in line with forecasts. Lastly, average earnings index 3m/y was slightly worse at 0.9% versus its survey of 1.7%. Sterling advanced nearly 100 pips against the USD and pushed the GBP/USD pair to a new session high of 1.5315 as well as gaining considerably against the rest of the majors.

BOJ’s Shirakawa on the wires… Posted: 17 Mar 2010 12:33 AM PDT Speaking at a press conference, BOJ governor Shirakawa made the following comments: Steps not aimed at affecting forex. 3 month fund supply has had positive effect on stocks and forex. The latest steps may eventually have an influence on forex through economic improvement. BOJ aims to support demand by pushing down long term rates. Latest step is additional monetary easing. Wants broad understanding of BOJ’s easy stance to boost economy. Japanese economy is somewhat overshooting BOJ’s forecasts. BOJ’s steps aimed at ensuring economy, price recovery. Short term market moves should not guide central bank policy. It will take time for prices to return to desirable level. BOJ policy alone cannot help beat deflation. There is no miracle step that would lift prices. BOJ will examine effects and drawbacks of each step in guiding monetary policy. A split vote will not hurt BOJ credibility.

3-17 Economic Calendar Posted: 16 Mar 2010 09:33 PM PDT

Japanese Overnight Call Rate Posted: 16 Mar 2010 08:58 PM PDT The BOJ, as expected, kept the overnight call rate at 0.10%; the result of a unanimous decision by the BOJ. In addition, the BOJ released the following statements: BOJ maintains its economic assessment. It will maintain very easy monetary conditions. It is important to pull Japan out of deflation. The fall of annual core consumer prices are narrowing. Policy board decision on expanding fixed rate funding operation was by a vote of 5-2; members Noda, and Suda voted against expanding the fixed rate funding operation. Japan’s economy is picking up but domestic demand lacks momentum. Following the release of these announcements, the JPY gained nearly 40 pips against the USD, EUR, and GBP.

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