Forex Market Updates & Commentary

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• USDJPY moves toward next target
• Fed’s Plosser on the Wires
• Inventories fall but it is because of a sales surge
• USDCHF breaks higher.
• Forex Morning Report- Jan 11
• US Wholesale Inventories at 10AM
• AUDUSD tests yesterday’s floor and finds sellers
• GBPUSD looking to break key trendline resistance
• Feds Plosser on the newswires
• EURUSD defining support and resistance in anarrow range
• Canada Housing Starts
• Bobbys Corner-Open Market-Jan.11.2011
• The NY Opening Forex Commentary is available
• Canada Housing Starts Due at 8:15AM
• 1-11 Economic Calendar

USDJPY moves toward next target Posted: 11 Jan 2011 07:22 AM PST As per the Morning Commentary, the 83.38 level is the next upside target for the USDJPY. Above that 83.56 is the focus. The move back above the 82.84-87 level paved the way for higher levels today.  From there the break above the 100 day MA at 83.06 and the 100 hour MA at the 83.09 level gave an added push.

Fed’s Plosser on the Wires Posted: 11 Jan 2011 07:14 AM PST Says: Congress needs to commit to stabilize U.S. debt U.S. needs ‘credible plan’ to contain deficit Long rates may have increased on outlook for economy ‘Caution and patience’ can be virtues in policy Doesn’t see risk for Europe as ’substantial’ for U.S. ‘Independence of the fed is extremely important’ better consumer spending, sales not result of QE2 Fed balance sheet has ‘got to shrink’ State, Local government problems to be eventually fixed Fed needs to see if inflation expectations are stable Inflation expectations ‘certainly’ aren’t falling

Inventories fall but it is because of a sales surge Posted: 11 Jan 2011 07:05 AM PST November Wholesale inventories fell by 0.2% but it was a result of a surge in sales by 1.9%.  This took the inventory to sales ratio down to 1.48 from 1.50.  When inventories are depleted it is bad for current GDP but if it is a result of sales, the inventories should need to be restocked down the road. So it is a positive for future GDP. As a result the news is probably a net positive for the economy and the dollar. Sales   1.9%    vs 2.6% last month  ex-petroleum  1.2%  vs  1.9% last month  Durable goods  1.7% vs  0.8% last month   Automotive  -3.6% vs  -0.9% last month   Computers  2.5%  vs  -1.2% last month   Machinery  1.4%  vs  4.2% last month  Nondurable goods  2.1% vs   4.1% last month   Drugs   3.1%  vs -2.7% last month   Groceries   -0.7% vs  -1.1% last month   Petroleum   7.1%  vs  7.8% last month

USDCHF breaks higher. Posted: 11 Jan 2011 07:02 AM PST Moves above resistance at 0.9732 and now looks to test the 61.8% of the move down from teh November high to the low in December at 0.9773.  A move above that and the 100 day MA at the 0.9812 level becomes the focus If this pair is serious about the break, the USDCHF should find support on any profit taking against the 0.9728-33 level (high from mid December).

Forex Morning Report- Jan 11 Posted: 11 Jan 2011 06:54 AM PST

US Wholesale Inventories at 10AM Posted: 11 Jan 2011 06:29 AM PST

AUDUSD tests yesterday’s floor and finds sellers Posted: 11 Jan 2011 06:19 AM PST  The AUDUSD has been pressured as a result of slower China growth (Trade showed weakness), the floods which continue to keep coal production and mining stymied and last night the Trade surplus came in less than expectations. Nevertheless, the price found support against the 61.8% of the last leg higher in the pair at the 0.9811 level.  The bounce has taken the pair up to the low from yesterday 0.9884.  The failure to break this level, is leading to the bears taking control again.  For the pair, a move below the 0.9810 level will target the 100 day MA (blue line in the day chart above) at 0.9739. The AUDUSD has not been below the 100 day MA since July and August (one day the price closed below the level - see chart below).

GBPUSD looking to break key trendline resistance Posted: 11 Jan 2011 06:10 AM PST The price in the GBPUSD is moving above trendline resistance (see chart above) and should lead to further upside momentum. The topside targets are the highs from last week. 1.5626, 1.5645 and 1.5663 are the steps higher to target. On the downside support at 1.5578-86 should limit the declines.  A move back below suggests the market momentum higher is a failure.

Feds Plosser on the newswires Posted: 11 Jan 2011 05:56 AM PST QE2 needs review.  Supports debate on the policy He has doubts about asset purchases

EURUSD defining support and resistance in anarrow range Posted: 11 Jan 2011 05:54 AM PST With the Eurozone auctions this week keeping the market contained (Spain, Italy, Portugal), and the ambiguous US employment report, the EURUSD is once again contained in a range that is less than 100 pips. The average over the last month is 130 -140 pips. The non trending nature of the market is indicative of a market that is unsure. The “big boys” are waiting.  The market is coiling. I do expect a break out with a trend like move.  I will let the market decide via the breaking of the key borderlines. The question is will it go higher or lower?  Let the market decide. Look for the momentum on the break. Because the market is defined, there are key targets within the range. ON the downside today there is a floor at the 1.2938 level and 1.2914 (see horizontal lines in chart above). A move below 1.2938 targets 1.2914 and then the low from yesterday at 1.2873. A break of that opens the downside for a more substantial decline and a resumption of the downside. On the upside, trendline resistance at 1.2980, the high today at 1.2991 and the 100 hour MA (blue line) at the 1.3012-17 area need to be broken. If done, the 1.3072 area becomes a focus. This is the 200 day MA. In the EURO debt market, Japan indicated today that they would support debt issued to support Ireland.  Yields are down on the Irish debt this week versus last Friday’s close, as are yields on Greece and Portugals debt, but Spain rates are still slightly higher versus last weeks closing yields on Friday.

Canada Housing Starts Posted: 11 Jan 2011 05:18 AM PST Canada Housing Starts:     Survey: 180.0K     Actual:  171.5K       Prior: 187.2K      Revision:  188.1K Dec vs. Nov-Monthly Change Total:  -13.5%   vs  18.2% Urban Areas:  -13.3%   vs   21.0% Single Family:  -2.6%   vs   14.3% Multi Family:  -20.1%   vs   25.5% Rural Areas:  -14.5%   vs   2.7%

Bobbys Corner-Open Market-Jan.11.2011 Posted: 11 Jan 2011 05:08 AM PST Good Morning: Sovereign debt issues continue to be the main catalyst of the marketplace.  Japan made comments that they also will be looking to purchase EU debt.  This did little to push the markets after it was noted that Japan will be using their current Euro reserves, and will not be looking to purchase additional FX for these debt purchases. Japan, like China has become the 2nd major Asian nation to show their support for the EU debt markets. Portugal’s Finance Minister says he sees no need for a bailout for his country-we will have to wait and see how that plays out.  The Aussie will come under as traders fear that the floods that have plagued the country will shave off .3% of Australian GDP this year. Asian quity markets were mixed, and European markets are higher.  US Futures are also higher at this time. Oil:$89.75                                                               Gold:$1383.20   7:30A.M. NFIB SMALL BUSINESS OPTIMISM DEC. 94.5O 93.2O 10:00A.M. IBD/TIPP ECONOMIC OPTIMISM JAN. 47.O 45.8O 10:00A.M. WHOLESALE INVENTORIES NOV. 1.00% 1.90% HAVE A GREAT DAY & GOOD LUCK

The NY Opening Forex Commentary is available Posted: 11 Jan 2011 05:05 AM PST The EURUSD is higher but contained. GBPUSD sold off on data to MA support but bounced. The pair is following the EURUSD The USDJPY is back above 82.87 The 100 hour MA is catching up to the USDCHF and should force the market to make a decision today. Does it go up or down? Use the MA for clues These are discussed and more in the morning commentary Webinar today:”Why the Moving Average is not a lagging indicator…sometime, and how to benefit from it”. To register:  http://forex.fxdd.com/97328/misc/fxdd-live-education-with-greg-and-shawn-tuesday-jan-11th

Canada Housing Starts Due at 8:15AM Posted: 11 Jan 2011 04:37 AM PST

1-11 Economic Calendar Posted: 10 Jan 2011 08:55 PM PST

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