Forex Market Updates & Commentary

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• USDJPY tests trendline resistance at 81.90. Key level.
• Feds Evans on the newswires
• Fed’s Dudley on the Wires
• EURUSD approaches low from last week at 1.3775. 1.3830 resistance now
• Forex Morning Report- Oct 19
• Bank of Canada remains unchanged as expected
• Bank of Canada Lending Rate Stays the Same
• Bank of Canada Interest Rate decision due at 9:00 AM
• Bank of Canada Rate Decision 9AM
• Fed Speak on tap for today
• Building Permits weak, Housing Starts better. USDJPY eyes 200 hour MA
• Housing Starts Higher as Building Permits Down
• Feds Lockhart favors additional QE
• NY Opening Forex Commentary_PBOC raise rates
• US Housing Starts & Building Permits Data at 8:30AM

USDJPY tests trendline resistance at 81.90. Key level. Posted: 19 Oct 2010 06:56 AM PDT

Feds Evans on the newswires Posted: 19 Oct 2010 06:42 AM PDT Fed needs several large purchases for price goal For many a price level path would be a hard pill to swallow (refers to the idea of promoting inflation. This is not customary but something the Fed is prepared to do) Sees extraordinary instance of liquidity trap. His comments are consistent with a large QE program. If the market does not rally strongly off these comments then it is likely that liquidation of longs is in the process. Watch 1.3830 above.

Fed’s Dudley on the Wires Posted: 19 Oct 2010 06:40 AM PDT Current status of economy ‘wholly unsatisfactory’ Says ‘New Jersey’s economy remains essentially flat’ New York State and New York City ‘are recovering’ Recession less severe in New York region than in others U.S. Recovery ‘likely to strengthen only gradually’ Housing, Consumer spending show signs of sluggishness Confidence in U.S. economy ‘remains quite low’

EURUSD approaches low from last week at 1.3775. 1.3830 resistance now Posted: 19 Oct 2010 06:36 AM PDT

Forex Morning Report- Oct 19 Posted: 19 Oct 2010 06:30 AM PDT Forex Morning Report- Oct 19

Bank of Canada remains unchanged as expected Posted: 19 Oct 2010 06:02 AM PDT See weaker US recovery Cuts 2010 growth to 3% from 3.5% Currency tension could hurt global economy 2011 growth cut to 2.3% from 2.9% 2012 raised to 2.6% from 2.2% Larger than forecast output GDP CPI to reach 2% by by end of 2012 Global stimulus largely over Global shift to fiscal consolidation Any further moves to be carefully considered The USDCAD is approaching the 50% retracement, 200 day MA and 100 day MA at 1.0324, 1.0349 and 1.0357

Bank of Canada Lending Rate Stays the Same Posted: 19 Oct 2010 06:02 AM PDT

Bank of Canada Interest Rate decision due at 9:00 AM Posted: 19 Oct 2010 05:57 AM PDT The USDCAD has risen sharply as lower oil and higher overall dollar is leading to a sharp increase. The central bank is expected to keep the rates unchanged. The pair is above trendline at the 1.0261 level. Look for support against this level. On the topside the 1.0325 level is the 50% of the move down from the August 31st high of 1.0669 to the low of 0.9981

Bank of Canada Rate Decision 9AM Posted: 19 Oct 2010 05:55 AM PDT

Fed Speak on tap for today Posted: 19 Oct 2010 05:51 AM PDT Feds Lockhart has already spoken on CNBC this morning. He is expected to speak again later today. He is not alone as Fed’s Dudly, Fisher, Kocherlakota, Bernanke and Duke are also expected to speak. Ms Duke, Bernanke and Dudley are voting members on the board. Fisher, Kocherlakota and Lockhart are not voting members 10:00 Fed’s Dudley Speaks at Regional Economic Briefing 11:30 Fed’s Lockhart to Speak in Nashville on Economy 12:50 Fed’s Fisher Speaks in New York 13:20 Fed’s Kocherlakota Speaks in Fargo, North Dakota 16:00 Bernanke Gives Brief Remarks in Fairfax, Virginia 19:00 Fed’s Duke Speaks in New York

Building Permits weak, Housing Starts better. USDJPY eyes 200 hour MA Posted: 19 Oct 2010 05:43 AM PDT

Housing Starts Higher as Building Permits Down Posted: 19 Oct 2010 05:32 AM PDT Housing Starts:    Survey: 580K    Actual: 610K    Prior: 598K    Revised: 608K Housing Starts (MoM)%:    Survey: -3.0%    Actual: .3%    Prior: 10.5%      Building Permits:    Survey: 575K    Actual: 539K    Prior: 569K    Revised: 571K Building Permits (MoM)%:    Survey: 0.7%    Actual: -5.6%    Prior: 1.8%    Revised: 2.1%

Feds Lockhart favors additional QE Posted: 19 Oct 2010 05:20 AM PDT However, he is not a voting member. Says exchange markets expect QE More concern about possible deflation Recovery to be gradual Forex Policy is the responsibility of the treasury Fed is focused on the domestic economy. Dollar is one consideration but it is not the most prominent indicator he looks at in policy decisions Still hears business recovery has a “long way to go” Housing seeing some sales pick up but not a lot of improvement in housing Skeptical that bring mortgage rates down may not create a big rush to buy houses

NY Opening Forex Commentary_PBOC raise rates Posted: 19 Oct 2010 05:00 AM PDT

US Housing Starts & Building Permits Data at 8:30AM Posted: 19 Oct 2010 04:58 AM PDT

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