Forex Market Updates & Commentary

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• Pending Home sales higher.
• EURUSD breaks below the 1.3743 level
• The NY Morning Forex Commentary is available for viewing
• Gold finds support from weak data, but contained
• EURUSD torn at these levels.
• Weak US data sends the dollar lower
• Bobbys Corner-Open Market-Jan.27.2011
• Jobless Claims Rise Along with Weaker Durable Goods Orders
• Initial Claims soar to 454K. Durable Goods plunge
• Some key data today. ECB inflation rhetoric persistent
• US Jobless Claims & Durable Goods Orders Data due at 8:30AM
• The NY Opening Forex Commentary is available for viewing
• UK CBI realized sales as expected at 37.
• Euro higher after comments from ECB’s Bini Smaghi
• Sarkozy Comments

Pending Home sales higher. Posted: 27 Jan 2011 07:03 AM PST December ISM also revised higher to 58.5 form 57 Pending home sales came in at +2% MoM, the YoY came in at -3.6% vs -2.8%. Lower prices and relatively low rates have stabilized the market.

EURUSD breaks below the 1.3743 level Posted: 27 Jan 2011 07:00 AM PST The EURUSD fell below the 1.3743 level but has found support buyers against the 38.2% retracement of the days trading range. That level comes in at the 1.3711 level and the low come in at 1.3712. The corrective lows on an earlier move went to 1.3710. On the topside, the move above 1.3743 should have been a bullish event but the high at the 1.3757 level formed a double top. Traders overall are likely to think the EURUSD is too high. Hence the selling on moves higher. With the price below the 1.3743 level now, the topside intraday traders will start to use that level as resistance again. If the price moves above this would be indicative of more buying interest and a test of the highs could be expected. On the downside, break the 1.3710 level and there should be further selling pressure.

The NY Morning Forex Commentary is available for viewing Posted: 27 Jan 2011 06:34 AM PST   EURUSD hanging around the key 1.3743 level (61.8% Fibo Retracement) but finds sellers at the high for the day Gold finds some support against 1333.50 today.  Weak data should help along with Japan downgrade USDJPY rises on downgrade, but falls on US data GBPUSD rises to target level and finds intraday profit takers. This and more in the morning commentary.

Gold finds support from weak data, but contained Posted: 27 Jan 2011 06:07 AM PST

EURUSD torn at these levels. Posted: 27 Jan 2011 05:58 AM PST 1.3743 is the 61.8% retracement. High for the day finds profit takers.

Weak US data sends the dollar lower Posted: 27 Jan 2011 05:50 AM PST

Bobbys Corner-Open Market-Jan.27.2011 Posted: 27 Jan 2011 05:45 AM PST Good Morning: The main event in the FX arena was the unexpected downgrade of Japan’s credit rating to AA- by S&P.  Japan has the world’s largest debt load, and S&P stated that they do not feel that the government is doing enough to curb the spiraling deficit.  This along with continued deflation and lackluster GDP growth added to S&P’s decision to announce the downgrade. Japan’s cost of borrowing will no doubt increase, as we have seen with other countries with sovereign debt issues.  Concerns that sovereign debt problems will continue to plague not only the Euro Zone, but will spread to other regions on a larger scale than originally thought are weighing heavily on investors minds. This mornings data is very disappointing for investors and the US economy overall.  Jobless claims increased 51K, and Durable Goods in December 2010  droped by 2.5%. US stock futures turned lower after the news, but are presently flat. European equity markets are higher-and Asian markets were mixed, with Tokyo up 76 pts. Oil:$87.14                                                                                   Gold:$1335.00 8:30A.M. CHICAGO FED NAT ACTIVITY INDEX DEC. O.11 - O.46 8:30A.M. DURABLE GOODS ORDERS DEC. 1.50% -1.30% -0.30% 8:30A.M. DURABLES EX TRANSPORTATION     DEC. 0.90% 2.40% 3.60% 8:30A.M. CAP GOODS ORDERS NONDEF EX AIR DEC. 1.30% 2.60% 8:30A.M. CAP GOODS SHIP NONDEF EX AIR DEC. 1.00% 8:30A.M. INITIAL JOBLESS CLAIMS 22-Jan 4O5K     404K 8:30A.M. CONTINUING CLAIMS 15-Jan 3873K 3861K 10:00A.M. PENDING HOME SALES MoM DEC. 1.00% 3.50% 10:00A.M. PENDING HOME SALES YoY DEC. -2.40%   HAVE A GREAT DAY & GOOD LUCK

Jobless Claims Rise Along with Weaker Durable Goods Orders Posted: 27 Jan 2011 05:35 AM PST Durable Goods Orders:   Survey: 1.5%      Actual: -2.5%   Prior:  -1.3%    Durables Ex Transportation:   Survey:  0.9%      Actual: 0.5%     Prior:  2.4%    Cap Goods Orders Nondef Ex Air:   Survey:  1.3%     Actual:  1.4%    Prior:  2.6%     Revised: % Cap Goods Ship Nondef Ex Air:    Actual:  1.7%    Prior:  1.0%      Jobless Claims:  Survey:  405K    Actual: 454K   Prior: 404K    Revised:  403K    Continuing Claims:  Survey: 3873K    Actual:  3991K    Prior: 3861  Revised: 3897K

Initial Claims soar to 454K. Durable Goods plunge Posted: 27 Jan 2011 05:30 AM PST BUT Ex Trans up 2.4%…CORRECTION.  Bloomberg is changing the values. The new numbers for Durable Goods is -2.5% headline. Ex Transportation +0.5% and Cap Goods Order non Defense ex air comes in at +1.4%.  SO overall, all the day for the US came out weaker than expectations. Regarding the initial claims, officials are saying that weather from a few weeks ago led to the improvement last week and the surge higher this week. They also are saying that seasonal volatility is effecting the numbers. The USDJPY is lower. The EURUSD is higher. The 61.8% of the move down from November comes in at 1.3743. Key level to eye.  GBPUSD is higher, the USDCHF is lower.  Gold is higher.

Some key data today. ECB inflation rhetoric persistent Posted: 27 Jan 2011 05:21 AM PST The Initial Claims and Durable Goods increase the risk for traders at 8:30 AM. Strong numbers will be needed it seems to keep the EURUSD from moving higher. The EURUSD remains supported by the shift in rhetoric from ECB officials who have shifted there focus onto inflation. A lower EURUSD increases import inflation and whether that is oil or commodities and those costs may be “temporary”, the ECB is concerned about the effects of those prices, making its way into other prices. So core inflation is not a concern. Headline inflation is. The tact may simply be a way to talk the EURUSD higher or perhaps stabilize it. It is not thought that the ECB would tighten. To do so would increase the risk to the economies which are under pressure and who are contracting fiscally. On the other extreme is the countries like Germany who are benefitting from a stronger global economy but who may have inflationary forces which the ECB does not want to get out of hand. If prices are raised in Germany, they are raised to the weaker economies as well who import from them. The ECB does not want to see this happen. As a result, if the US data were to come out weak (Durable expected to come in at +1.5, Initial Claims are expected at 405K) , the EURUSD may have more room to run. Key support remains the 100 hour MA. Today, the price bounced off the key MA level (blue line in the chart below) and that gave the technical reason to cover shorts/buy the EURUSD. The price has been above the 100 hour MA since January 12th.  People/traders may feel the market is overbought, the EURUSD should go down for this reason or that reason, but the fact is until the price moves below the 100 hour MA, the bias is bullish. Listen to what “the market” is saying. Above the 100 hour MA is still bullish.

US Jobless Claims & Durable Goods Orders Data due at 8:30AM Posted: 27 Jan 2011 05:09 AM PST

The NY Opening Forex Commentary is available for viewing Posted: 27 Jan 2011 04:12 AM PST

UK CBI realized sales as expected at 37. Posted: 27 Jan 2011 03:03 AM PST

Euro higher after comments from ECB’s Bini Smaghi Posted: 27 Jan 2011 02:48 AM PST The euro rallied after ECB board member Lorenzo Bini Smaghi made comments that policy makers can no longer afford to ignore imported inflation. He stated that ”a permanent and repeated increase in the prices of imported products will tend to impact on inflation in the advanced countries, including the euro area”. Import price inflation in Germany was 12 percent in December, the fastest pace since October 1981. He made certain it was clear that his comments should not be interpreted as any sort of policy signal. Following these comments the EUR/USD made a new session high of 1.39367.

Sarkozy Comments Posted: 27 Jan 2011 02:35 AM PST French President Nicolas Sarkozy made the following comments: G-20 was “vital” in ending global crisis. “Now, the going gets tougher” for G-20. Sovereign debt and deficits are “major” risk. “Staggering debts” cause imbalances. Financial imbalances have grown fivefold. Imbalances can “bring down whole house of cards”. Soaring commodity prices, volatility are risks. No one wants to weaken the dollar. Dollar shouldn’t be the only reserve currency. “Makes no sense” that China is not in the FX discussions. Yuan should be in IMF’s SDR currency baskey. Seeks “foundations” for a new currency system.

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