Forex Market Updates & Commentary

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• USDCAD tests 38.2% retracement
• GBPUSD moving tests 200 hour MA
• Forex Morning Report - March 19
• EURUSD pressing the downside
• Canada Retail Sales better than expectations. USDCAD looks toward parity.
• Bobbys Corner-Open Market-March.19.2010
• Canada Retail Sales due at 8:30 AM. USDCAD remains pressured
• The March 19th 2010 NY Opening Forex Commentary is available for trading
• Canadian CPI
• MPC’s Tucker Speaks
• Bundesbank’s Sarrazin
• EU’s Rehn on the wires…
• Trichet Speaks
• Japanese National Strategy Minister Sengoku Speaks
• German PPI

USDCAD tests 38.2% retracement Posted: 19 Mar 2010 07:08 AM PDT The USDCAD is back up testing resistance against the 38.2% retracement of the days range at the 1.0109 level.  Watching the level to provide some resistance.  The higher dollar has led to the short covering rally of f the trendline lows.  Additonal resistance comes in  at 1.0118 and 1.0124.

GBPUSD moving tests 200 hour MA Posted: 19 Mar 2010 06:59 AM PDT The GBPUSD has moved below the 200 hour MA at the 1.5116 level and looks toward the next support level at the 1.5065 level.   This is the 61.8% retracement of the move up from the March 10th low to the high at 1.5380 pm March 17th. The pound has been hit hard today on the back of the comments from BOE Sentance on how he is concerned about a double dip recession.

Forex Morning Report - March 19 Posted: 19 Mar 2010 06:30 AM PDT Click here to view the embedded video.

EURUSD pressing the downside Posted: 19 Mar 2010 05:52 AM PDT The EURUSD is pressing the 2 week low prices at the 1.3528. 1.3538 and 1.3551 levels as NY continues to pressure the currency. The Greece situation/lack of action has the market back eyeing the downside for the pair.  The rates that Greece is to pay for its upcoming debt obligation (10 billion euro on April 20 and May 19th) had widened to 330 pips above German debt at current market rates.  The country needs to have this premium subsidized and/or have the market spread contract. So far, any austerity announcements have not impressed the market nor narrowed the spread. The EU is not fully committed to making any concrete support although some have suggested (i.e Trichet) that they might need to in order to keep confidence in the EU.  If not, that leaves the IMF as a source of last resort.  Time will tell, but until then, the focus is on the negative.   The market move higher over the last few weeks but stalled below the target topside levels of 1.3852/73 as represented by the low from the February 1st and the 38.2% retracement (see chart below).  The trend back to the downside seems to have reasserted itself and a look toward the low at 1.3437 is likely.    On the topside, watch for 1.3569 to provide resistance (see chart below).  This is the 28.2% retracement of the days trading range.

Canada Retail Sales better than expectations. USDCAD looks toward parity. Posted: 19 Mar 2010 05:34 AM PDT Headline up 0.7% and Less Autos +1.8% (vs 0.5%).  The  USDCAD  has moved to new lows at 1.0061 (trendline support). It is hard to see the USDCAD not testing parity soon.  The upside should be contained by1.0097 now.

Bobbys Corner-Open Market-March.19.2010 Posted: 19 Mar 2010 05:19 AM PDT Good Morning: The Euro lost ground again as concern that Greece will not be able to secure a bailout package from the EU lowered demand for the single currency.  The Euro will continue to be under pressure while the EU decides if they will be the provider of an aid package to Greece, or will the IMF be the preferred option for a bailout. World equity markets rose, and US futures are slightly higher this morning. Metals also rose, and oil fell. Oil:$81.77                                                        Gold:$1122.30 No major data today. HAVE A GREAT DAY-WEEKEND & GOOD LUCK

Canada Retail Sales due at 8:30 AM. USDCAD remains pressured Posted: 19 Mar 2010 05:14 AM PDT The US Retail Sales report for is due at 8:30 AM. The expectation is for a 0.6% increase for the headline and +0.5% for the ex Auto.  Last month the Retail Sales increased by 0.4% and 0.4% for both.  Earlier today CPI came out better than expectations. This continued the string of better economic data over the last few weeks for the Canadian economy and put them on track (or perhaps ahead of the pace) for a tightening at the end of the 2nd quarter.  From a techincal perspective, the price will target the low from yesterday at the 1.0088 level. Below that is the lowest level since July 2008 at Thursdays low price of 1.0069.  There may be some early buyers against these levels for quick intraday traders. Oil is down a bit, but the fundamental bias should keep the loonie supported (USDCAD pressured).  The upside should find resistance at 1.0118 and 1.0130 area (see the 5 minute chart below).

The March 19th 2010 NY Opening Forex Commentary is available for trading Posted: 19 Mar 2010 04:27 AM PDT Click here to view the embedded video.

Canadian CPI Posted: 19 Mar 2010 04:06 AM PDT The CAD made major advances across the board after the release of better than expected February CPI numbers. USD/CAD, which had been trading in tight range this session decline nearly 80 pips to a new session low of 1.0097 while CAD/JPY made a new high of 89.58.  The details are as follows: Core CPI (m/m) - Survey: 0.3%   Actual: 0.7%   Prior: 0.1% CPI (m/m) - Survey: 0.4%   Actual: 0.4%   Prior: 0.3%

MPC’s Tucker Speaks Posted: 19 Mar 2010 03:41 AM PDT The BOE’s deputy governor Paul Tucker made these comments while speaking on a a penal in Brussels: Bank special resolution regimes aren’t enough. Rescue burden must fall on creditors, not the public. Bank rescue plans don’t solve cross-border issues. Global rescues need equitable creditor treatment. Investment bank rescues require new rules.

Bundesbank’s Sarrazin Posted: 19 Mar 2010 03:15 AM PDT Bundesbank’s Thilo Sarrazin, talking in Salzburger, made comments that he sees “no need” to mull over the idea of giving Greece aid and that Greek bankruptcy would not hurt the euro. These comments released just before the EUR/USD finally broke out of its 30 point range and made a new low of 1.3559

EU’s Rehn on the wires… Posted: 19 Mar 2010 03:09 AM PDT The EU’s Rehn made the following statements: Economic recovery is not yet self-sustaining. “Worst is over” for the European economy. The drive for regulatory overhaul has slowed down. Greece is the “most urgent” challenge for the euro zone. Greece and Europe are “not yet out of the woods’. EU policymakers are working on the framework to aid Greece. Germany is providing “substantial” from economic stimulus. Urges a “more specific” decision on Greece at the EU summit.

Trichet Speaks Posted: 19 Mar 2010 01:29 AM PDT Speaking at a conference on crisis management framework, ECB President Jean-Claude Trichet made the following statements: There is a need to strengthen longer-term confidence. Need more transparency in CDS markets. Must strengthen the financial system to reduce contragion risk. Need central counterparty facilities for CDS.

Japanese National Strategy Minister Sengoku Speaks Posted: 19 Mar 2010 01:01 AM PDT In an interview, Japan’s National Strategy Minister Sengoku made the following statements: There is “extremely little” room for further Japanese stimulus. Fiscal condition leaves little room for stimulus. More BOJ easing may have a small impact on deflation. Monetary easing has a “psychological” effect.

German PPI Posted: 19 Mar 2010 12:44 AM PDT A slightly worse than expected PPI number out of Germany could not do anything to move the EUR/USD out of its 29 point range for the session.  The February reading was 0.0% versus a 0.1% survey and 0.8% prior reading. The EUR/USD is currently trading at 1.3616.

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