Forex Market Updates & Commentary

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• US Housing Market Index Rises
• Forex Trading Webinar - Tuesday Oct 19 at 4pm
• NAHB Housing Market index comes in a better than expectations
• Weaker data leads to weaker dollar. Gold rallies back up.
• Forex Morning Report- Oct 18
• Industrial Production weaker than expectations
• Industrial Production Falls as Capacity Utilization Stays Put
• TIC Data shows large increase in Treasury purchases in August
• US TIC Flows Rise
• US Industrial Production & Capacity Utilization Data 9:15AM
• EURUSD unsure in early NY trade
• US Net & Long-term TIC Flows Data 9AM
• Feds Fisher on the newswires
• Dollar rebounds from Friday’s levels as NY enters for the week

US Housing Market Index Rises Posted: 18 Oct 2010 07:03 AM PDT

Forex Trading Webinar - Tuesday Oct 19 at 4pm Posted: 18 Oct 2010 07:00 AM PDT FXDD Forex Trading Webinar - Tuesday Oct 19 at 4pm with Greg Michalowski and Shawn Powell - Register now to reserve your seat.

NAHB Housing Market index comes in a better than expectations Posted: 18 Oct 2010 07:00 AM PDT Housing Market Index for October 16 vs 13 last month Single family sales: Present 16 vs 13 last month Single family sales: Future 23 vs 18 last month Prospective Buyers Traffic 11 vs 9 last month The National Association of Home Builders index is at the highest level in 4 months. The index rose to 22 in May 2010, and reached a low of 8 in January of 2009. Despite the increase, the homebuilders survey was as high at 72 in June 2005. Needless to say, levels remain at depressed levels. Supply of existing homes remains a drag on new construction and a glut of foreclosed houses remains a concern going forward.

Weaker data leads to weaker dollar. Gold rallies back up. Posted: 18 Oct 2010 06:53 AM PDT   The weaker Industrial Production data (-0.2% vs expectation of +0.2%) has the dollar on the defensive once again. This was the first drop in Industrial Production since June 2009.  With the Fed seemingly tied to the economic data, any weak number will likely cause a dollar sell off and a strong number dollar strength.  The EURUSD has moved back toward the 200 hour MA at the 1.3946 level.  A break of that will target the 38.2% of the move down from Friday’s high.  The dollar selling has also led a a move higher in gold and it tests the 100 hour MA at the 1366.55 area.  The price of gold did fall below the 200 hour MA in earlies London trading for the first time since September 28th, but rejected that move quickly. A break above the 100 hour MA would reestablish the bullish bias for the much watched commodity.

Forex Morning Report- Oct 18 Posted: 18 Oct 2010 06:40 AM PDT Forex Morning Report- Oct 18

Industrial Production weaker than expectations Posted: 18 Oct 2010 06:17 AM PDT Comes in at -0.2%. This is the first decline since June 2009. Capacity Utilization fell to 74.7 from 74.8 last month.  Although up from 68.2 low last June 2009, a more normal level is around 80%.  As a result, capacity continues to remain subdued.

Industrial Production Falls as Capacity Utilization Stays Put Posted: 18 Oct 2010 06:16 AM PDT Industrial Production:    Survey: 0.2%    Actual: -.2%    Prior: 0.2%   Capacity Utilization:   Survey: 74.8%    Actual: 74.7%    Prior: 74.7%    Revised: 74.8%

TIC Data shows large increase in Treasury purchases in August Posted: 18 Oct 2010 06:06 AM PDT The Net Long Term TIC Flows showed a large oversized 128.7B inflow for August. The gain can be attributed to a large increase of purchases of notes and bonds to $117 billion from $30 billion in July. China remained the largest holder fo US debt as it increased its holdings to $868.4 billion in August. This was up 21.7 bilion versus July. The data suggests that there is no problems in floating debt in the US but it is likely the gains were a result of the flight to quality that occurred in the month of August. The chart below shows how the dollar rose against the EURUSD in August. Since September, however, the dollar has come under consistent selling pressure.  As a result, the data is likely to come back lower next month.

US TIC Flows Rise Posted: 18 Oct 2010 06:01 AM PDT Total Net TIC Flows-       Actual:  38.9B         Prior:  63.7B        Revised:  63.3B Net Long-term TIC Flows-      Actual:  128.7B         Prior:  61.2B        Revised:  61.2B

US Industrial Production & Capacity Utilization Data 9:15AM Posted: 18 Oct 2010 05:51 AM PDT

EURUSD unsure in early NY trade Posted: 18 Oct 2010 05:48 AM PDT

US Net & Long-term TIC Flows Data 9AM Posted: 18 Oct 2010 05:22 AM PDT

Feds Fisher on the newswires Posted: 18 Oct 2010 05:16 AM PDT Retail Sales was surprising on the upside Much liquidity in the system US companies are being defensive Fed is not alone on helping economy Fed not a substitute for fiscal authorities Most important thing right now is employment 2% is considered “stalled” No incentive for companies to hire Fishers comments are indicative of further QE.  The thought in the Fed seems to be with Employment not showing any improvement, it will lead to sluggish growth and continued low inflation.

Dollar rebounds from Friday’s levels as NY enters for the week Posted: 18 Oct 2010 04:50 AM PDT

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