Forex Market Updates & Commentary

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• Richmond Fed Index Much Higher as Consumer Confidence Falls
• Consumer Confidence & Richmond Fed Manufacturing Index Due at 10AM
• The NY Morning Forex Commentary for Dec 28th
• US S&P/CaseShiller Moves Lower
• EURUSD tests support area for the pair
• The NY Opening Forex Commentary_Dec 28th 2010
• US S&P CaseShiller Data at 9AM
• USD/JPY Testing Daily Support
• Swiss UBS Consumption Indicator
• 12-28 Economic Calendar
• Japan’s Noda on the newswires talks about Yen
• EURUSD holding above the 1.3224 level
• USDCHF falls on dollar selling
• GBPUSD squeezes higher as well
• $EURUSD breaks up to 38.2% retracement at 1.3224. Don’t see any news

Richmond Fed Index Much Higher as Consumer Confidence Falls Posted: 28 Dec 2010 07:04 AM PST Consumer Confidence:    Survey: 56.3     Actual: 52.5       Prior: 54.1     Revised: 54.3 Richmond Fed Manufacturing Index:      Survey: 11     Actual:  25      Prior: 9

Consumer Confidence & Richmond Fed Manufacturing Index Due at 10AM Posted: 28 Dec 2010 06:44 AM PST

The NY Morning Forex Commentary for Dec 28th Posted: 28 Dec 2010 06:44 AM PST The dollar finds profit taking strength in NY trading. Technicals turn bearish as well.

US S&P/CaseShiller Moves Lower Posted: 28 Dec 2010 06:02 AM PST S&P/CaseShiller Home Price Index:      Actual: 145.32    Prior: 147.49     Revised: 147.27 S&P/CS 20 City MoM% SA:     Survey: -0.60%    Actual: -.99    Prior: -0.80%     Revised: -.96 S&P/CS Composite- 20 YoY:     Survey: -0.20%    Actual: -.80     Prior: 0.59%     Revised: .44

EURUSD tests support area for the pair Posted: 28 Dec 2010 05:18 AM PST The EURUSD had a ceiling at the 1.3201 level until earlier today. When the price broke above that level in the first few hours of the trading today, the price scooted quickly higher.  Now the pair is back down testing the support level.  The 38.2% of the weeks range is at the 1.3195 area.  A break below 1.3193 would not be welcomed and would likely indicate some additional choppy trading for the time being.  If support holds, watch the 1.3224 level above. It may be that level is the topside resistance while 1.3195 area becomes support.

The NY Opening Forex Commentary_Dec 28th 2010 Posted: 28 Dec 2010 05:09 AM PST The USDJPY fell sharply overnight. Comments from Finance Minister Noda failed to stem the selling in the pair.  The EURUSD rallied overnight, squeezing shorts in the process.  The move above the 1.3201 level and then the 1.3224 level were catalysts for the pair. USDCHF made new lows once agains but has moved above underside support. These and more are discussed in the NY Opening Forex Commentary today.

US S&P CaseShiller Data at 9AM Posted: 28 Dec 2010 04:39 AM PST

USD/JPY Testing Daily Support Posted: 28 Dec 2010 12:57 AM PST The USD/JPY pair tested daily support again with it’s session low of 82.36. Shown below, you can see that this is the third time this level has been tested since November 10th; it also comes in just below the 38.2% retracement line on the move from September 16th highs to November 1st lows. A close below this level may be a bearish signal for the pair in which case we may look to 81.58 as the next daily downside target. If support holds, 83.08 is the next significant level to the topside. It should also be noted that possible resistance is show in the area of 84.37; the pair hasn’t traded above this level since October 5th.

Swiss UBS Consumption Indicator Posted: 27 Dec 2010 11:05 PM PST The CHF softened slightly after the UBS consumption indicator came in at 1.63; worse than the prior reading of 1.71.

12-28 Economic Calendar Posted: 27 Dec 2010 08:59 PM PST

Japan’s Noda on the newswires talks about Yen Posted: 27 Dec 2010 05:54 PM PST Japanese Finance Minister Yoshihiko Noda on newswires saying: The Yen movement is a little one sided Will take bold action if neccesary on currency Will keep watching the market closely. He made similar comments on Friday.   The USDJPYafter rallying to 84.51 in mid December, has drifted down and is back below the 100 day MA at the 83.39 level.   The low for December came in at the 82.32.  The BOJ intervened in September 2010 at the 82.87 level may be in the mind of the Finance Minister.  With the price at 82.66 - below the intervention level - the level might be stirring memories of the line in the sand level.  SInce this is the second similar comment  since Friday, it is not scaring the market just yet.  However, one can not rule out intervention at some.  Where there is smoke, there may be fire, so be aware. PS Inflation data out of Japan argues for a weaker Yen but the bias remains bullish for the currency (bearish for the USDJPY)

EURUSD holding above the 1.3224 level Posted: 27 Dec 2010 05:25 PM PST The 38.2% retracement of the move from the Dec 14 high to the low on Dec 22 came in at 1.3224. The price correction off the high has so far held that level and keeps the bulls in charge and possibly the shorts concerned.  The next target above is at 1.3260. The 50% of the same move down comes in at 1.3276.  That would be a more signficant level for the pair.

USDCHF falls on dollar selling Posted: 27 Dec 2010 04:47 PM PST The USDCHF fell below its 100 hour MA at the 0.9576 level and through the Friday low at the 0.9552 level.  The price has rebounded but will need to stay below the 0.9576 level to keep the bears in the pair happy.  A break with momentum below the 0.9556 -61 area is also required to also satisfy the shorts in the pair (and will frighten the traders who are bulls or dip buyers). On Friday, the price fell to below the 0.9556 level but quickly rebounded.  Todays deja vu trade is fresh in the minds of traders.  Traders don’t like the same thing to happen twice to them. So it a new low is not made soon, look for buyers on the dip.

GBPUSD squeezes higher as well Posted: 27 Dec 2010 04:30 PM PST The high from Friday came in at 1.5474 and approached the next bullish hurdle at the 200 hour MA at the 1.5491 level (high reached 1.5486). I would expect sellers against the level by profit takers, but would also expect and warn that a break of it should ignite additional buyers. Last weeks high came in at 1.5575. Before that level comes the 1.5567 level which is the 38.2% retracement of the move down from the December 14th high to the low on December 21st (see chart below). Watch 1.5456 level as support.  If the price falls through this level, it would disappoint the GBPUSD bulls and likely lead to some selling.

$EURUSD breaks up to 38.2% retracement at 1.3224. Don’t see any news Posted: 27 Dec 2010 04:18 PM PST Stops triggered above the 1.3201 high from last week and straight up to the 38.2% retracement of the move down from the Dec 14th high to the low. That level comes in at 1.3224. Be wary of some profit taking at the level, but watch for buyers on dips toward 1.3201. If momentum can be sustained, there is not much resistance until 1.3256-60 area, then 1.3280-83

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