Forex Market Updates & Commentary |  |
- EURUSD tests resistance. Will it hold?
- USDCAD contained in a narrow range, but does it provide an opportunity?
- The NY Morning Forex Commentary, Webinar registration Lesson 4, Rebroadcast of Lesson 3
- Capacity Utilization and Industrial Production come out weaker
- USDCHF moves higher on Swiss government support
- Canada Manufacturing Sales & Leading Indicators Lower
- US Housing Starts Much Higher, Building Permits and PPI also Improve
- US Data stronger. Housing Starts surge. Canada Sales slow.
- AUDUSD maintains price below 100 hour MA
- EURUSD tests trendline support. Back below 100 day MA
- The NY Opening Forex Commentary is available for viewing
- US PPI, Housing Starts, Building Permits Data at 8:30AM
- Canada Leading Indicators & Manufacturing Sales Data due at 8:30AM
- Us Mortgage Applications falls 9.5% in current week
- German Chancellor Merkel nominates youngest Bundesbank Chief
| EURUSD tests resistance. Will it hold? Posted: 16 Feb 2011 07:40 AM PST
The EURUSD has moved back higher after failing to break through the low from yesterday. THe price is now up testing the underside of the trendline that was broken in early NY trading at 1.3505 level. If the level holds and finds sellers, it keeps the door open for another test and break of the days low (and yesterdays low at the 1.3459 level). If the price moves above the level, the 100 hour MA (blue line in the chart above) at the 1.3528 level is the next target. 1.3539 is the 100 day MA and would be another key level above. It is decision time for the EURUSD. |
| USDCAD contained in a narrow range, but does it provide an opportunity? Posted: 16 Feb 2011 07:33 AM PST A reader of the commentary emailed me with the following comment “USD/CAD is in 3rd day in this 53 pip or less range. The last time this happend started on February 14 2007 for 4 days and than on March 22 2007 for 3 days. That’s the 2 times since 2006. I guess in February traders don’t like USD/CAD…” When the range is contained and non-trending, it increases the chances for a trend type move. The reason is non-trending markets tend to transition into trending markets. Although in Feb 2007, the market remained consolidative, in March 2007, the nontrending period was the beginning of a sharp move to the downside.
Is there another move in store in 2011? Could be. In fact, it is a good time to anticipate a trend type move as risk can be small while the potential for a trend move tends to be higher. The question becomes “Which way?”. When the market is non -trending like it is, I believe what the market is telling me. To me the market is saying “I don’t know what the next move is going to be”. After all, if it knew, it would go there. Most peopletraders try to guess. I prefer to see what “the market” (with the proxy being the price and technical tools) is saying. To do that, I like to focus on the key technical levels using MAs, trendlines, and/or Fibonacci retracements.
In the hourly chart above the range over the last 3 days is clear. There is support at the 0.9858 and 0.9850 levels, and resistance at the 0.9888 and the 0.9902/05 levels. With the current price in between these extremes, the “market” is still saying “I don’t know”. At some point, the price will look to make a break. Look for a breach of the initial price, followed by the next level to provide the clues. On a break, look for the levels outlined to become support/resistance (dependent on which way it breaks). Also look for increased momentum and the target steps to be overtaken (follow the arrows). As long as the targets are reached, the trend continues. Manage the stops by following the market and key levels higher or lower (dependent on the break direction). If the break fails. That is if the low level is taken out but no momentum is found and the price reverses, simply get out. Regroup. If the momentum does show up and targets are reached and breached, anticipate the trend to continue and manage the trade with this idea in mind. It may be time to anticipate a trend in the USDCAD. Watch closely and be aware. |
| The NY Morning Forex Commentary, Webinar registration Lesson 4, Rebroadcast of Lesson 3 Posted: 16 Feb 2011 06:40 AM PST The NY Morning Forex Commentary: FXDD Lesson 3 Rebroadcast: We had another great webinar yesterday on “The Forex Traders Game Plan“. To watch the rebroadcast, go to http://forex.fxdd.com/webinars . Scroll down to the Rebroadcast area and all the lessons are listed there. Lesson 4 Registration. Thursday Feb 17th at 4 PM. FREE TO ALL. To attend you do need to register. Topic: Lesson 4 “Rules for Currency Trading”. The lessons progress with a look at the Rules that Traders need to follow in order to help fulfill the requirements of the Game Plan and support the overall Mission Statement. |
| Capacity Utilization and Industrial Production come out weaker Posted: 16 Feb 2011 06:18 AM PST The Capacity Utilization and Industrial Production came out weaker than expectations. Industrial Production fell by -0.1% vs expectations of 0.5% for the month of January. Meanwhile Capacity Utilization fell to 76.1 from a revised 76.2 (was 76.0). The market was expecting 76.3%. The numbers may have been effected by the unusually harsh winter weather over much of the country. Manufacturing accounts for 11% of the economy. The dollar has declined slightly on the report. |
| USDCHF moves higher on Swiss government support Posted: 16 Feb 2011 06:05 AM PST
The USDCHF moved higher today and looks toward the next longer term targets . The price has moved higher on the back of the Swiss Government support for exporters and other industries such as tourism which are being hurt by the strength in the CHF. Although the governments moves are designed to help as a result of the currency strength, the announcement has helped weaken the CHF in the process as well (at least for today). The SNB tried unsuccessfully to stem the strength of the CHF in 2010, but has since abandoned such measures. The move higher has pushed the price back above the 100 day MA after an earlier fall to support against the underside of the trendline (see daily chart above). The key upside target for the pair now comes in at the 0.9803 level where the 38.2% Fibo Retracement of the move down from the August 2010 high to the Dec 2010 low comes in currently. Stay above the 100 day MA and the bias remains to the upside on a longer term basis. Of the hourly chart, the price is approaching the weeks high at the 0.9744 level. This may slow the surge higher. A break of the level will next target last Friday’s high at 0.9774. On the downside for today, look for support at the 0.9713 level. This is the 61.8% of the move down from the Feb 11th high to the low today. If this level can hold, the shorts/bulls should feel more confident about the move higher today. A break of that level, howver, could see the price move down to the 0.9697 area. The underside of the trendline break, the 50% retracement and the 100 bar MA are all located in this area. This level should find stronger support today (see hourly chart below).
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| Canada Manufacturing Sales & Leading Indicators Lower Posted: 16 Feb 2011 05:41 AM PST Leading Indicators MoM: Survey: 0.4% Actual: 0.3% Prior: 0.5% Revised: 0.4% Manufacturing Sales(MoM): Survey: 3.0% Actual: 0.4% Prior: -0.8% Revised: -0.6% Manufacturing Sales by Region |
| US Housing Starts Much Higher, Building Permits and PPI also Improve Posted: 16 Feb 2011 05:35 AM PST
Housing Starts: Survey: 539K Actual: 596K Prior: 529K Revised: 520K Housing Starts (MoM)%: Survey: 1.9% Actual: 14.6% Prior: -4.3% Revised: % Jan vs. Dec Building Permits: Survey: 559K Actual: 562K Prior: 635K Revised: K Building Permits (MoM)%: Survey: -10.9% Actual: -10.4% Prior: 16.7% Revised: % Producer Price Index (MoM): Survey: 0.8% Actual: 0.8% Prior: 1.1% Jan vs. Dec PPI Ex Food & Energy (MoM): Survey: 0.2% Actual: 0.5% Prior: 0.2% Producer Price Index (YoY): Survey: 3.5% Actual: 3.6% Prior: 4.0% PPI Ex Food & Energy (YoY): Survey: 1.2% Actual: 1.6% Prior: 1.3% |
| US Data stronger. Housing Starts surge. Canada Sales slow. Posted: 16 Feb 2011 05:33 AM PST The housing starts surged 15% to 596,000. However it was led by a 78% surge in multi family jump to 183,000 rate. Single family starts fell 1%. The multi family surge is curious but may reflect a turnaround toward rental units as people get foreclosed on their homes. Building permits meanwhile fell by -10.4%. PPI rose by 0.8% as expected but ex food and energy the rise of 0.5% was greater than expectations at 0.5%. Last months headline figure was revised lower at 0.9% from 1.1% In Canada, Manufacturing Sales increase much less than expectations with a gain of 0.4% vs 3% last month. |
| AUDUSD maintains price below 100 hour MA Posted: 16 Feb 2011 05:31 AM PST
The AUDUSD keeps its bearish bias as the price remains below the 100 hour MA and trendline resistance at the 1.0015 area. If the price stays below this level, the downside is the preferred. direction. On the downside, the targets become important to surpass. Moving below the levels are needed to satisfy shorts. In the hourly chart above the 0.9972 level is the 61.8% of the move up from the January 20th low to the high reached on February 4th. The price moved below that level yesterday but rebounded higher to test the 100 hour MA today (blue line in the chart above). In London trading the price tested the level but again bounced. A move below should open the downside for more technical selling. On the daily chart sits probably the most important technical level below against the 100 day MA and trend line support. That level comes in at the 0.9923 currently (see chart below). A break of the 0.9972 level will next look toward this level. I would expect buyers against this level.
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| EURUSD tests trendline support. Back below 100 day MA Posted: 16 Feb 2011 05:13 AM PST
The price is back below the 100 day moving average at the 1.3539 level. This level will be watched in the NY trade today (blue line in the chart above). On the downside in the same chart, the price support comes in at 1.3485 where the 38.2% of the move up from the low of 2011 to the high of 2011. The low today came in at the 1.3482 as shorts covered.
Looking at the hourly chart, in addition to the 38.2% retracement off the daily chart, the market ran into support from the upward sloping trendline (see hourly chart at 4 - 1.3499). The 100 hour MA currently comes in at at 1.3531. WIth the 100 day MA at the 1.3539 level, if the price bias is going to remain to the downside, this area will need to hold resistance. Look for sellers against the area with stops on a break back above the 100 day MA (at 1.3539). |
| The NY Opening Forex Commentary is available for viewing Posted: 16 Feb 2011 04:49 AM PST
To Register: https://www1.gotomeeting.com/register/279553209 |
| US PPI, Housing Starts, Building Permits Data at 8:30AM Posted: 16 Feb 2011 04:38 AM PST
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| Canada Leading Indicators & Manufacturing Sales Data due at 8:30AM Posted: 16 Feb 2011 04:31 AM PST
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| Us Mortgage Applications falls 9.5% in current week Posted: 16 Feb 2011 04:27 AM PST The fall takes the applications to a 2 year low. Within the numbers, the purchase index fell by -5.9% while refinancings fell by a wider -11.4%. The 30 year mortgage rate fell to 5.12% from 5.14% With interest rates nearly 100 basis points up from the lows the mortgage market has slowed as affordability declines. A rebound at the current rates will only come if new jobs are created and the pent up demand from new buyers emerges. It is all about Jobs, Jobs, Jobs. |
| German Chancellor Merkel nominates youngest Bundesbank Chief Posted: 16 Feb 2011 04:21 AM PST Jen Weidman, the chief economic advisor to Angela Merkel, replacing the resigning Axel Weber who resigned his post after being overlooked as a replacement for Jean Claude Trichet as ECB head when his term expires in October. |
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