Forex Market Updates & Commentary |  |
- EURUSD falls after testing resistance. EURJPY and EURCHF also pressured
- The FOMC will be key today
- NY Opening Forex Commentary. Gold watched. FOMC eyed later
- GBP Falls, but recovers following trade balance
- Pound Falls Following Worse Than Expected Trade Balance and House Prices
- BOE’s Miles
- UK CPI, Trade Balance, and House Price Index at 4:30
- Longer Term Hourly EUR/USD
- Noyer Comments:
- EUR/USD Makes New Session Low Following German CPI/WPI
- Coming Up At 2 am EST…..
- JPY Household Confidence 41.2%
- Japanese Household Confidence in 20 Minutes
- Cable Finding Hourly Support - Trading at 100 Hour MAVG
- 10-12 Economic Calendar
| EURUSD falls after testing resistance. EURJPY and EURCHF also pressured Posted: 12 Oct 2010 07:12 AM PDT |
| Posted: 12 Oct 2010 06:04 AM PDT Oil is down $-0.30. Gold is down $6.20. DJ Futures are down around 50 pts. S&P down 6.4. Dax is down 11.65. FTSE down 21. Other than the Investors Business Daily/TIPP Economic Optimism index due at 10 AM ET, (Est 44.5 vs 45.3), the FOMC decision at 2:00 is the only other event/release. The FOMC statement from the September21st meeting focused on inflation (or lack of it) and employment. In it they said: “Measures of underlying inflation are currently at levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to remain subdued for some time before rising to levels the Committee considers consistent with its mandate.” They finished the statement with the following: “The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.” The inclusion of the word “mandate” implied that the Fed was failing in this job requirement, and that in turn led to the sharp sell off in the dollar. Any further clarification from the meeting in the minutes will be eyed today. So what does it all mean for the market? A look at where we “are” and where we “were” prior to the announcement may be in order. Since the FOMC meeting, the EURUSD has tacked on a move from 1.3283 (high from September 21) to a high of 1.4028. The EURUSD over the last month of trading (dating to September 10th) has moved 10.9% or 1385 pips from the low to the high. That is a good move historically over a month of trading, and typically leads to a correction. The correction over the last few days has taken the pair back below the 100 hour MA (only the second time over the last month that the price closed below the 100 hour MA at 1.3910) and the 200 hour MA at the 1.3816 level). In early NY trade the price has moved back above the key 200 hour MA. This is intraday bullish and the MA now becomes support. Close resistance this morning is at the 1.3856 level (low from October 7th). A move above this level will next target the 100 hour MA at 1.3910.
The market is expecting to see more detail out of the Fed today but what will make the trading more difficult is what is already priced in. The EURUSD has moved 10.9% from September 10th low to high. The move from the low has gone 18.12% (since June 7th low of 1.1856). The bias to the dollar is negative with employment weak and additional QE looming, but sentiment can turn. A central bank comment, a weaker number, worry about the weak sisters of the EU, gold correction, even breaking key technical levels can all help shift sentiment around. A normal correction can see the price move down to 1.3500 (38.2% of the move up from September 10th low). So the action after the release will be watched closely today. Staying below the 100 hour MA keeps the bearish bias in the intermediate term. A reactionary move up toward this level and failure to get above will bearish for the EURUSD. Pay attention to the area at 1.3900. I would expect sellers with stops above (do not ignore a move above the 100 hour MA - that MA will be a key borderline I feel)). On the downside a move below the 1.3800 level will be bearish (October 6th low) and will target last weeks lows at 1.3637 and then the 1.3500 level in the intermediate term. |
| NY Opening Forex Commentary. Gold watched. FOMC eyed later Posted: 12 Oct 2010 04:51 AM PDT |
| GBP Falls, but recovers following trade balance Posted: 12 Oct 2010 01:39 AM PDT Cable dropped to 1.5837 following the worse then expected trade balance number, but has since recovered slightly trading back around 1.5850.
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| Pound Falls Following Worse Than Expected Trade Balance and House Prices Posted: 12 Oct 2010 01:32 AM PDT
Additionally, the retail price index was 4.6% versus a 4.4% forecast and 4.7% prior reading. |
| Posted: 12 Oct 2010 01:27 AM PDT
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| UK CPI, Trade Balance, and House Price Index at 4:30 Posted: 12 Oct 2010 01:15 AM PDT
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| Posted: 12 Oct 2010 01:07 AM PDT Looking at a longer term hourly euro chart, we see that the recent selling in the pair moved it through the 50% line (1.38325) on the move from the October 4th low to the high on October 7th. With the last 3 hourly candlesticks the EUR/USD has tested the 200 hour moving average which currently comes in at 1.38118. If support continues, 1.38325 is the first stop to the topside.
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| Posted: 12 Oct 2010 12:43 AM PDT ECB’s Noyer made comments that upside risks to Eurozone price stability are limited and that intervention in debt markets need to remain “expectional”. |
| EUR/USD Makes New Session Low Following German CPI/WPI Posted: 11 Oct 2010 11:02 PM PDT German Final CPI came in as expected at -0.1% and WPI was better than expected at 1.0%. Following the release the EUR/USD made a new session low of 1.3819. Also notive that the pair has made a full retracement from the low on October 8th to Sunday’s open. The 100.0% line comes in at 1.38330. A close below this line may signal further bearish trading for the pair.
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| Posted: 11 Oct 2010 10:46 PM PDT
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| JPY Household Confidence 41.2% Posted: 11 Oct 2010 10:32 PM PDT The market had a limited reaction to Japan’s worse than expected household confidence which was 41.2. |
| Japanese Household Confidence in 20 Minutes Posted: 11 Oct 2010 09:39 PM PDT
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| Cable Finding Hourly Support - Trading at 100 Hour MAVG Posted: 11 Oct 2010 09:24 PM PDT After finding resistance at 1.59626 yesterday, the pair traded continually lower through out Monday’s (U.S.) trading day and found support at the 23.6% retracement line at 1.58673; the low for the session. After moving up through the 38.2% line, the pair is now trading in the area of the 100 hour moving average at 1.59019, which we would call a “border line”, since movement could be bullish about the level and bearish below. The next topside target is the 50.0% at 1.5919.
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| Posted: 11 Oct 2010 08:50 PM PDT
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