Forex Market Updates & Commentary

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• EURUSD continues the march higher
• Philadelphia Fed makes annual revisions
• EURUSD continues higher
• Forex Morning Report- Jan 13
• EURUSD tests next target and finds sellers
• EURUSD continues march higher on weak US employment and Trichet positive comments
• Trichet Q&A
• GBPUSD 50% being tested on dollar selling
• USDJPY breaks below support at 82.80
• Trichet comments from press conference
• US Jobless Claims Higher, PPI & Trade Balance Stronger
• Initial Claims weak at +35K for the week
• EURUSD approaches 61.8% Fibo Retracement
• UK PM Cameron on the tape. GBPUSD supported by $ selling
• Bobbys Corner-Open Market-Jan.13.2011

EURUSD continues the march higher Posted: 13 Jan 2011 07:34 AM PST The EURUSD continued its march to new highs above the 1.3350 level. The next target is 1.3361. Support on the bottom trendline at1.3318.  On the hourly chart the 1.3321 area was a floor/ceiling area in the end of December/early January.

Philadelphia Fed makes annual revisions Posted: 13 Jan 2011 07:16 AM PST The Philadelphia Fed has announced their annual revisions. The effect is a lower index than what was reported a few weeks ago. Specifically, General Business Activity: 20.8 vs 24.3 Employment Index 5,1 to 4.3 Business conditions to 24.3 to 20.8 New orders from 14.6 to 10.6 If you recall, the 24.3 reading was much higher than the 15.3 expectations at the time. The move down to 20.8 is still near the high for the year. It just is not as great as once thought. With initial claims up sharply today, this is another body blow for the US economy today.

EURUSD continues higher Posted: 13 Jan 2011 07:03 AM PST Video Pending

Forex Morning Report- Jan 13 Posted: 13 Jan 2011 06:45 AM PST Forex Morning Report- Jan 13

EURUSD tests next target and finds sellers Posted: 13 Jan 2011 06:41 AM PST The EURUSD broke above trendline resistance and moved to the next target at the 1.3321 level. The sharp move to the upside seems to have found a reason to pause but  the bias remains in tact if the price can remain above the upper channel trendline which comes in currently around the 1.3275-80 area.  A move back within the channel should indicate a tired market and likely consolidation with a bullish bias.

EURUSD continues march higher on weak US employment and Trichet positive comments Posted: 13 Jan 2011 06:08 AM PST The weaker Initial Claims is a disappointment. Meanwhile with better auctions as a backdrop, Trichet has brought up higher short term inflation which has gotten the market worried about a possible tightened - despite the insistency that rates are appropriate.  In the chart above the upper channel trendline is being tested.  This may prompt some slowing of the surge higher. Support now comes in at 1.3235-45 for the pair now.  If the market continues to rise, the new key target is the 1.3321 which was  key support and resistance at the end of December and early January (see chart below)

Trichet Q&A Posted: 13 Jan 2011 05:51 AM PST Inflaiton higher than expected and energy prices are contributing to the increase Inflation could temporarily increase. Price stability likely by the end of the year Expect inflation over medium term and long term to be inline and firmly anchored Never precommited to raise  rates.   Will raise whenever price stability is in danger Average inflation is 1.97% over the last 12 years.  Inflation is in line with this rate Stability should be improve in quantity Insolvency of ECB is absurd ECB asking Governments to be up to their responsibility. There is sense of urgency

GBPUSD 50% being tested on dollar selling Posted: 13 Jan 2011 05:47 AM PST

USDJPY breaks below support at 82.80 Posted: 13 Jan 2011 05:46 AM PST

Trichet comments from press conference Posted: 13 Jan 2011 05:36 AM PST Rates are appropropriate See short term upward pressure in inflation (sends the EURUSD higher) Current policy is accomodative Inflation expectations firmly anchored Uncertainty is elevated All non standard measures are temporary Exports should benefit from global growth RIsk to the downside Risk due to financial market tension Also rise in oil prices a risk Dec inflation higher than expected. Mostly due to commodities CPI may stay above 2% for some months Risk of inflation to the upside. Monitoring closely Major reforms needed in countries with high deficits Structural reforms in employment needed to made to promote sustained growth

US Jobless Claims Higher, PPI & Trade Balance Stronger Posted: 13 Jan 2011 05:34 AM PST Jobless Claims:  Survey:  410K    Actual: 445K   Prior: 409K    Revised:  410K    Continuing Claims:  Survey: 4088K    Actual:  3879K    Prior: 4103  Revised: 4127K Producer Price Index (MoM):     Survey: 0.8%    Actual: 1.1%       Prior: 0.8%   PPI Ex Food & Energy (MoM):    Survey: 0.2%    Actual:  0.2%       Prior: 0.3%    Producer Price Index (YoY):     Survey:  3.8%    Actual: 4.0%      Prior: 3.5%    PPI Ex Food & Energy (YoY):     Survey: 1.4%    Actual: 1.3%     Prior: 1.2%        Trade Balance:  Survey:  -40.5B    Actual: -38.3B      Prior:  -38.7B   Revised:  -38.4B

Initial Claims weak at +35K for the week Posted: 13 Jan 2011 05:31 AM PST The number surges to 445k from 410K.  This should increase the dollar selling on the huge disappointment.  PPI higher headline number at +1.1% for the MoM Trade balance is better at -38 B.  Exports rose by 0.8% greater than the import growth of 0.6%. The initial claims is a disappointment. The USDJPY tests key support at the 82.80 level

EURUSD approaches 61.8% Fibo Retracement Posted: 13 Jan 2011 05:29 AM PST THe EURUSD approaches 61.8% Fibo Retracement.  I would expect to see some profit taking selling against this level.

UK PM Cameron on the tape. GBPUSD supported by $ selling Posted: 13 Jan 2011 05:21 AM PST Says, “Strong Euro region is in British interest.” The BOE kept their policy unchanged this morning. Unlike the ECB, they do not have any comments that come out with their decision. One wonders when that will change in this day of full transparency. Instead they will release the minutes of their meeting on January 26th. Nevertheless the GBPUSD is being supported with the general dollar selling today and a move back into the EURUSD being a catalyst for the trend. The next key target for the pair is the 50% retracement off the daily chart of the move from the November 2010 high to the low n December. That level comes in at 1.5818. The high for the day is at 1.5796 (of course 1.5800 is likely to be a level where the market also pauses).

Bobbys Corner-Open Market-Jan.13.2011 Posted: 13 Jan 2011 05:17 AM PST Good Morning: As investors optimism rises  that European leaders will  take significant steps to ease the region”s debt crisis, the Euro has strengthened.  Demand at today’s Spanish debt sale was high, and  the ECB announced that they would be keeping interest rates steady, helping the Euro firm up. As expected, the BOE also kept interest rates steady, and will continue with their QE program. This morning-the markets will be looking at Trade Balance and Jobless Claims data-along with ECB President Trichet’s monthly statement to get a handle on the economic picture. Asian equity markets were higher-Europe is mixed-and US Futures are up slightly. Oil:$91.81                                                       Gold:$1381.50 7:00A.M. BANK OF ENGLAND RATE DECISION unchanged 7:45A.M. ECB RATE DECISION  unchanged 8:30A.M. ECB PRESS CONFERENCE 8:30A.M. INITIAL JOBLESS CLAIMS  8-Jan 408K 409K 8:30A.M. CONTINUING CLAIMS 1-Jan      41OOK 4103K 8:30A.M. PPI MoM DEC. 0.80% 0.80% 8:30A.M. PPI EX FOOD & ENERGY MoM DEC. 0.20% 0.30% 8:30A.M. PPI YoY DEC. 3.80% 3.50% 8:30A.M. PPI EX FOOD & ENERGY YoY DEC. 1.40% 1.20% 8:30A.M. TRADE BALANCE  NOV.       -$40.8B  -$38.7B HAVE A GREAT DAY & GOOD LUCK

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