Forex Market Updates & Commentary

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• Forex Morning Report- Sept 27
• EUR/USD testing the longer term 50% fibonacci level
• Bobbys Corner-Open Market-Sept.27.2010
• Eur/Usd under pressure as Moody’s downgrades AIB’s debt
• Eurozone Annual M3 Money Supply growth 1.1%
• Trichet on the wires
• Kaieda on the wires
• 9-27 Economic Calendar
• Japan’s Trade Balance

Forex Morning Report- Sept 27 Posted: 27 Sep 2010 06:25 AM PDT Forex Morning Report- Sept 27

EUR/USD testing the longer term 50% fibonacci level Posted: 27 Sep 2010 05:22 AM PDT EUR/USD is currently testing the longer term 50% fibonacci level from the move down which started in November of 2009 to the low made in May of 2010. The 50% Fibo comes in at 1.3508. A break above would send the pair heading towards the 61.8% level which comes in at 1.3893, with a resistance level in between the two Fibonaccis at 1.3685 area. If the pair fails to break higher, traders may see a return to test the 200 Day moving average which lies at 1.3200 today (green line.) Below this, the 38.2% level comes in at 1.3123. We are back to full trading with most world markets open and as such there will be momentum which will help the market to choose a direction. Look for clear breaks to help signal entry points on the shorter time frames.

Bobbys Corner-Open Market-Sept.27.2010 Posted: 27 Sep 2010 05:17 AM PDT Good Morning: The start of the week saw the FX markets trade range bound throughout the Asian and European morning sessions. The Euro weakened a bit on speculation that Euro Zone banks will need more funds-slowed demand for Euro Zone assets.  The Euro is again under pressure as Ireland will disclose the cost of bailing out Anglo Irish Bank Corp later this week.  The euro also lost ground as reports from Der Spiel that the EC lacks confidence in German regional lenders. The Yuan appreciated to it’s highest level since 1993, as speculation mounts that the Chinese will allow faster appreciation of it’s currency.  World equity markets are higher as are US Futures at this time. The takeover markets had a very busy weekend-as Unilever agreed to buy Alberto Culver for $3.7 billion USD in cash, and Southwest airlines has agreed to but Air Tran for $1.4 billion USD in cash.   Oil rose-and gold continues to stay in record high territory. Oil:$76.80                                 Gold:$1301.10   TIME FOR EST. PRIOR 8:30A.M. CHICAGO FED NAT ACTIVITY INDEX AUG. O.OO 10:30A.M. DALLAS FED MANUF. ACTIVITY SEPT. -13.5O HAVE A GREAT DAY & GOOD LUCK

Eur/Usd under pressure as Moody’s downgrades AIB’s debt Posted: 27 Sep 2010 02:04 AM PDT Eur/Usd is making fresh lows brought upon by Moody’s downgrade of Anglo Irish Bank’s unguaranteed debt, from A3 to BAA3. The pair has traded down to 1.3425.

Eurozone Annual M3 Money Supply growth 1.1% Posted: 27 Sep 2010 01:03 AM PDT Eurozone M3 Money Supply y/y came in at 1.1%, stronger than the 0.4% expected and prior reading of 0.2%. Eur/Usd currently trades at 1.3460, unaffected by release.

Trichet on the wires Posted: 27 Sep 2010 12:15 AM PDT Trichet says; * ECB welcomes creation of ESRB * European Systemic Risk Board is complimentary to other institutions and won’t change ECB’s statutory role * ESRB has to act fruitfully with other institutions Eur/Usd has just come off 20 points on the heels of comments, now trading at 1.3455.

Kaieda on the wires Posted: 26 Sep 2010 11:25 PM PDT Japanese Economy Minister Kaieda had this to say to reporters in Tokyo; * BOJ should debate changing rule on bond buying’ not of opinion law should be revised * More BOJ fund injections may affect currency rates * Japan’s economy is in a severe situation, in a standstill

9-27 Economic Calendar Posted: 26 Sep 2010 09:15 PM PDT

Japan’s Trade Balance Posted: 26 Sep 2010 05:06 PM PDT Japan’s August Trade Balance reading posted its first year over year drop in 15 months; however USD/JPY remained unchanged on session highs. The action to open the trading week has been muted without any major events to report over the weekend, following last Friday’s intervention fears at ~these levels on aggressive orders that sparked a move through 85? We remain vigilant and cautious being short the USD/JPY pair. Corporate Services Price Index came in slightly higher than the prior month and expectations. The details of the releases are as follows: Trade Balance Total - Survey:200B   Actual:103.2B   Prior:804.2B Adjusted Trade Balance - Survey:522.1B   Actual:589.7B   Prior:610.4B Trade Exports (YoY) - Survey:19.0%   Actual:15.8%   Prior:23.5% Trade Imports (YoY) -Survey:17.5%   Actual:17.9%   Prior:15.7% Corp Service Price Index - Survey:-1.2%   Actual:   Prior:-1.2% On the chart below we could see the intervention fear rally from last week still kept the pair inside the channel, likely on further selling from Japanese exporters, bearish technicals (crossing mavg.) and continued pessimistic tone on the USD (presumption of more easing from the Fed.)

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