Forex Market Updates & Commentary

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• USDJPY remains in the doldrums
• Richmond comes in at 6 vs 5 expected. Existing Home Sales come in as expected
• Forex Morning Report - March 23
• GBPUSD between two trendlines.
• Canada Leading Indicator rise by 0.8%. USDCAD moves down.
• Bobbys Corner-Open Market-March.23.2010
• EURUSD moves to new lows in early NY trading but has support
• March 23rd 2010 NY Opening Forex Commentary is avaiable for trading
• UK CBI Realized Sales
• ECB’s Constancio on the wires…..
• BBA Mortgage Approvals/ RPI
• UK CPI
• Usd/Chf finds resistance, for now
• SNB’s Hildebrand Speaks
• Usd/Chf above 200 hour M/A, trying to break out of tight range

USDJPY remains in the doldrums Posted: 23 Mar 2010 07:10 AM PDT USDJPY moved up intially on the data moving above the 200 hour MA at the 90.42 level but has since retreated back lower.  A move above the 90.42 level with sustained momentum is needed to propel the pair higher with 90.72/79 the next key target area.  This area has contained the upside.  On the downside, the 100 day MA - currently at 90.06 remains the key level. The price has closed above the 100 day MA for 12 of 13 days but cannot extend higher. On a break of 90.72/79 the topside target would become the 200 day MA at the 91.60 level currently. On the downside, the 100 hour MA at the 90.34  followed by 90.18 become the targets before 90.06 (100 day MA).  It is what it is for the USDJPY as it struggles with the non-trending environment.

Richmond comes in at 6 vs 5 expected. Existing Home Sales come in as expected Posted: 23 Mar 2010 06:59 AM PDT Slightly better than expectations. for Richmond Existing Home sales come in at 5.02 million annualized. SLightly better than expected.  Months  supply goes to 8.6 vs 7.8 months which is not positive for prices going forward. USDJPY moved up intially on the data moving above the 200 hour MA at the 90.42 level but has since retreated back lower.  A move above the 90.42 level with sustained momentum is needed to propel the pair higher with 90.72/79 the next key target area

Forex Morning Report - March 23 Posted: 23 Mar 2010 06:36 AM PDT Click here to view the embedded video.

GBPUSD between two trendlines. Posted: 23 Mar 2010 05:55 AM PDT The bottom of the trendline broken last week held topside resistance. The downside support line was tested, pressuring the line at 1.4986 but has bounced back above the 1.5000 level.  The low reached today at 1.4972 matched the last low from yesterday before the move higher in NY trading.  The topside resistance comes in against the midpoint fo the weeks 2 day range at the 1.5021 level and above that at 100 bar MA on the 5 minute chart at the 1.5034 level (blue line in the chart below). The GBPUSD has been pressured on the back of slightly lower inflation released over night (CPI down to 3.0% instead of 3.1%).

Canada Leading Indicator rise by 0.8%. USDCAD moves down. Posted: 23 Mar 2010 05:32 AM PDT This is a touch less than the 0.9% expectations. The USDCAD has come down from the highs of the day, but remains above the 200 hour MA after testing the level in London trade.  The high for the day has been  1.0227 which is below the high reached yesterday at 1.0241.  The failure to take out the highs, should keep the pressure on the pair.   The 200 hour MA support at the  1.0172 level would be key support today (see chart above) . Closer support should come in at 1.0192 which is the 100 bar MA on the 5 minute chart (blue line below) The upside target if the price can maintain above the 200 hour MA would extend to the 38.2% retracement of the move down from the February 25th high to the March 19th low. That level comes in at the 1.0296 level.  First things first for the pair, however, is to get above yesterday’s high price.

Bobbys Corner-Open Market-March.23.2010 Posted: 23 Mar 2010 05:15 AM PDT Good Morning: The Euro dropped on speculation that the EU will not agree on a bailout package for Greece at their summit later this week-thus pushing demand for the USD as a refuge. The USD is stronger as pressure continues to mount against the Euro as the EU continues to argue among themselves regarding what would be the best way to assist Greece.  Some advocates are asking for the EU to intervene, while others consider the IMF the best option. EU President Van Rompuy is seeking  some agreement on aid to Greece prior to the opening of the EU summit. World equity markets moved higher as better than expected earnings are helping the equity markets worldwide.   Metals and gold were also lower in early morning trading. Oil::80.90                                     Gold:$1095.60    TIME FOR  EST PRIOR 10:00A.M. EXISTING HOME SALES  FEB. 4.98M 5.05M 10:00A.M. HOUSE PRICE INDEX MoM JAN. -0.90% -1.60% 10:00A.M. RICHMOND FED MANUFACT. INDEX MARCH 5.O 2.O 10:00A.M. EXISTING HOME SALES MoM FEB. -1.40% -7.20% HAVE A GREAT DAY & GOOD LUCK

EURUSD moves to new lows in early NY trading but has support Posted: 23 Mar 2010 04:56 AM PDT The EURUSD is making new day lows in early NY trade. No US data is out until 10AM when the Existing Home Sales and Richmond Fed are released.  The expectation is for 5.00M units down from 5.05M units. Month supply rose to 7.8 months last month after falling to 6.5 months in November . Richmond Fed is expected to rise to 5 from 2.  This index has been as high as 7 and as low as -4 in the last 5 months.  Canada has Leading indicators due out at 8:30 MA with expectations at  0.9% vs +0.9% last month. This would be the 9th straight month above 0 and extends the string of strong economic data for Canada.    From a technical perspective, the EURUSD has resumed its downward bias. The pair is testing the 61.8% retracement of the 2009 low to high move in the pair. That level comes in at 1.3482.  A move below, next targets the triple bottom from Feb/Mar between 1.3437-51.  The lows during that period were 1.3444, 1.3451 and 1.3437 in that order.   Needless to say that area should provide good support  and will need to be conquered for momentum down to continue.   Other downside support comes out at 1.3423 which is the low from May 2009 and below that longer term targets extend down to 1.3245 and 1.2897 which were the lows going back to the 1st half of 2009 (see daily chart above).  The 2009 low was 1.2456.  This too will be a downside target if the bearish bias picks up steam and focus remains on the EU situation.  On the topside, if the market disappoints from not being able to extend below the 1.3482 level, the EURUSD  has initial upside target resistance at 1.3502 and above that the 1.3513 level - the price we have been watching over the last few days.   The 100 hour moving average on the 5 minute chart comes in at the 1.3524 level and moving lower.   The midpoint of the days range is 1.3522. The EURUSD is being pressured by the Greece situation which will continue to be an ongong saga. As long as the focus can remain on “that story”, the pair will continue to trade toward the low end of the 2010 range.   The key words are “that story” as we know focus can shift on a dime in these markets. Down the road, there may be focus back on the US debt issues and overactive government involvement.  The Republicans will start to incite public outcry on the US health care issues and this will likely make for an election cycle that focuses on unseating the heavy spenders - and judging from reaction they may be successful.  It is hard to imagine that with so many in Congress, that not one Republican voted for the health care bill. Not one.   That is a divide, and a divide pitting one versus the other.  When there is so much bi-polar tension, the goals of what should be accomplished for the best of the people, gets clouded with ideological decisions and an us versus them attitude.  The parading around Capitol Hill is an example of that attitude.   Of course, there is the economy and the verdict is out on whether the jobs will be created to spur on the growth that would benefit the dollar over and extended period to keep the EURUSD working its way down.  The spending is there, but will it create the jobs or will it just take more money out of consumers pockets, increase the debt burden for generations, incite a lack of continuity and direction for Washington, and make things worse in the long term  All of which may not be good for the dollar nor the fabric of a nation. Divided we stand is not a positive foundation to build on.  Time will tell.

March 23rd 2010 NY Opening Forex Commentary is avaiable for trading Posted: 23 Mar 2010 04:23 AM PDT Click here to view the embedded video.

UK CBI Realized Sales Posted: 23 Mar 2010 04:03 AM PDT CBI realized sales was 13, lower than its forecast of 18 and no where near its prior reading of 23.

ECB’s Constancio on the wires….. Posted: 23 Mar 2010 03:30 AM PDT Vitor Constancio of the European Central Bank has released the following comments: There is risk of early exits from support measures. Does not see double dip recession from debt withdrawal. As long as we have depressed economy, there is no risk from inflation. Markets are not frozen any more. Economic cycles in different parts of the eurozone are not so different. There is still some remaining doubt about instruments given to systemic risk body. Securities area should be treated separately in regulation. Banking and insurance should be dealt with together in regulation. Need to resolve the conflict of interest with rating agencies. There is risk to be avoided in the timing of new regulatory measures. The problem of “too big to fail” might be becoming worse as surviving banks are bigger. The main regulation moves are supervision of leverage and international regulations of liquidity buffers. Big countries with big current account imbalances have to do their duty to avoid new crises. Stability must be reinforced in eurozone fiscal policies. Changes in the areas of stability and growth are needed.

BBA Mortgage Approvals/ RPI Posted: 23 Mar 2010 02:38 AM PDT Also released at the same time as CPI was BBA mortgage approvals and retail price index out of the UK: BBA Mortgage Approvals - Survey: 34.3K   Actual: 35.3K   Prior: 35.1K RPI (y/y) - Survey: 3.7%   Actual: 3.7%   Prior: 3.7%

UK CPI Posted: 23 Mar 2010 02:34 AM PDT UK CPI saw its first fall of a year over year reading since September 2009 after February’s readings did not meet their expectations. The GBP/USD pair also reached a new session low of 1.4993 following the release of the data. The details are as follows: CPI (y/y) - Survey: 3.1%   Actual: 3.0%    Prior: 3.5% Core CPI (y/y) - Survey: 3.0%   Actual: 2.9%   Prior: 3.1%

Usd/Chf finds resistance, for now Posted: 23 Mar 2010 01:23 AM PDT As cited in an earlier post, Usd/Chf found resistance at the 61.8% fibo of 1.0623. Though it did spike up to 1.0638 briefly, the pair has since retreated back to its 200 hour M/A and has now settled down to trade either side of the 50% fibo of 1.0611. If the pair holds above the move upward should be more decisive, with Usd/Chf  testing the 1.0638 high.

SNB’s Hildebrand Speaks Posted: 23 Mar 2010 12:51 AM PDT The following comments were made by SNB Chairman Philipp Hildebrand during his speech “The SNB’s Monetary Policy during the Financial Crisis” at the University in St. Gallen. SNB will counter excessive rise of franc. SNB will not allow franc appreciation to lead to deflation risks. Forecasts show that price stability is not in danger in the short term. Forecasts show that expansionary monetary policy cannot be kept over the long term. The position of the SNB is clear; will we not allow materialisation of deflation risks. SNB has means to fight excessive franc rise. The Swiss National Bank can buy very large quantities of foreign currencies. Immediately following the release of these statements EUR/CHF traded 50 pips lower making a new session low of 1.4329.  Additionally, during this move, the pair also broke through the 61.8% fibonacci level on the hourly chart.

Usd/Chf above 200 hour M/A, trying to break out of tight range Posted: 22 Mar 2010 11:15 PM PDT Usd/Chf has been stuck in a tight range in during a very quiet Asian session. The pair is just starting to show signs of life with a methodical move above its 200 hour M/A of 1.0603. It is also trading  just at the 50% Fibo retracement of the move down from 1.0661 to 1.0561. If the pair could hold above 1.0603 (200 hour M/A) look for a move to 1.0625-30 where we should find some resistance. A further push should bring Usd/Chf to 1.0655-60 signifying a full retracement. A failed break should send Usd/Chf back to 1.0585-90 and then eventually to the 100 hour M/A of 1.0577 where good support should lie.

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