Forex Market Updates & Commentary

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• EURUSD tests upside target on ECB Weber comments
• ECB Weber says only one way for interest rates…up
• Feds Bullard could adjust QE
• Economic Statistics: US Home Sales fall to 284K
• The NY Morning Forex Commentary for Feb 24th
• US New Home Sales Data due at 10AM
• GBPUSD moves above 100 hour MA at 1.6200 but has resistance above
• Gold moves higher as Mideast tension continues to dominate
• Durables good and bad, and Initial Claims better
• Jobless Claims Outlook Positive, Durable Goods as Expected with Ex Transport Lower
• NY Opening Forex Commentary for Feb 24th
• Durable Goods, Jobless Claims & Chicago Fed National Activity Data to be Released at 8:30AM
• UK CBI Realized Sales makes 8 month low
• Gbp/Usd tests 200 hour m/a
• Swiss employment level up 1.2% for the year

EURUSD tests upside target on ECB Weber comments Posted: 24 Feb 2011 07:28 AM PST The EURUSD has resistance at the 1.3811 level. A move above this level will likely lead to further buying. So far, the move higher has seen profit takers come in against the level. Risk is defined. Risk is limited.

ECB Weber says only one way for interest rates…up Posted: 24 Feb 2011 07:17 AM PST This is leading to a move higher in the EURUSD

Feds Bullard could adjust QE Posted: 24 Feb 2011 07:12 AM PST Would adjust QE program meeting by meeting Economic prospects better than November Oil prices significant for US consumers Job moves are slow and deliberate but expects unemployment to decline slowly

Economic Statistics: US Home Sales fall to 284K Posted: 24 Feb 2011 07:00 AM PST The Month supply rise to 7.9 months from 7.0 month last month. Median New Home Price $230,600 This is up 5.7% from a year ago. By regions: Northeast 34,000 vs 22,000 Midwest 41,000 vs 35,000 SOuth 143,000 vs 164,000 West 66,000 vs 104,000 Overall, a weaker report but if I were to rank importance at this point in the cycle the Existing Home sales is more important. With an overhang of supply still prevalent in the market, New Home construction is not the smart place to see advances. Builders and buyers realize this. So a substantial move higher is not really expected.

The NY Morning Forex Commentary for Feb 24th Posted: 24 Feb 2011 06:40 AM PST

US New Home Sales Data due at 10AM Posted: 24 Feb 2011 06:19 AM PST

GBPUSD moves above 100 hour MA at 1.6200 but has resistance above Posted: 24 Feb 2011 06:16 AM PST The GBPUSD has been bouncing between the 100 and 200 hour MA at the 1.6150 area and the 1.6200 level. The pair is breaking above the 100 hour MA at the 1.6200 level now and the market will now look for continued buying momentum.  The  high over the last eight hours of trading comes in at 1.6213 and a move above this level should lead to further upside momentum.  A failure on the break would likely lead to a rotation back to the downside. Looking at the 5 minute chart, the GBPUSD has resistance at the 200 bar MA at the 1.6206 level as well.  This area is therefore a tough level.   There could be profit taking sellers all the way up to the 1.6213 level.

Gold moves higher as Mideast tension continues to dominate Posted: 24 Feb 2011 06:04 AM PST Gold has moved higher again today, but the range is fairly narrow suggesting perhaps a better balance of buyers and sellers. With Saudi Arabia talking about increasing oil production, there is less an upward bias.  Nevertheless, the tension in the Middle East and oil prices still at the $100 a barrel price level, the safe haven trade seems to be continue to be in full swing. Of course the technicals, will give the clues about the fundamentals. So outlining the important levels is important. The price yesterday moved above the shallow trendline that defined the top earlier in the  week (see daily chart above). The low today dipped just below the trendline support $1409.67 level. This level will be a key borderline to watch on the downside today. From the daily chart, the next key topside target would extend up to the $1424 level where the November 2010 high comes in along with the 2011 high (1st trading day of the year). Off the hourly chart, there is topside trendline that comes in at the 1419.40 level currently. This is a closer target for the pair today and becomes the next target that has to be breached. On the downside, the high from yesterday at the $1410.95 level will be another support level.  If this level and the $1409.67 level (from the daily chart) are breached, some further profit taking can be expected. Until then,however, the bias is still to the upside for the pair.

Durables good and bad, and Initial Claims better Posted: 24 Feb 2011 05:37 AM PST Durable Goods headline number was as expected with a 2.7% gain (vs 2.8%) but the numbers are showing that ex Transportation fell by a much larger than expected -3.6% +0.5%. The decline however, was not as bad given the sharp revision in the previous month. That showed a revised 3% gain versus an initial gain of 0.5% so overall, there was good and bad in the report. The Initial Claims fell to 391K from a revised 413K (revised from 410K). Any improvement in jobs is good for the economy and should be good for the dollar. USDJPY is up a little on the news but the trend continues.

Jobless Claims Outlook Positive, Durable Goods as Expected with Ex Transport Lower Posted: 24 Feb 2011 05:33 AM PST Jobless Claims:  Survey:  405K    Actual: 391K   Prior: 410K    Revised:  413K    Continuing Claims:  Survey: 3880K    Actual: 3790K    Prior: 3911K  Revised 3935K Durable Goods Orders:   Survey: 2.8%      Actual: 2.7%   Prior:  -2.5%    Durables Ex Transportation:   Survey:  0.5%      Actual: -3.6%     Prior:  0.5%    Cap Goods Orders Nondef Ex Air:   Survey:  -1.0%     Actual:  -6.9%    Prior:  1.4%     Revised: 4.3% Cap Goods Ship Nondef Ex Air:    Actual:  -2.0%    Prior:  1.7%      Chicago Fed Nat Activity Index:  Survey:  0.09%     Actual:  -.16%    Prior:  0.03%     Revised: %

NY Opening Forex Commentary for Feb 24th Posted: 24 Feb 2011 05:29 AM PST

Durable Goods, Jobless Claims & Chicago Fed National Activity Data to be Released at 8:30AM Posted: 24 Feb 2011 04:35 AM PST

UK CBI Realized Sales makes 8 month low Posted: 24 Feb 2011 03:05 AM PST CBI Realized Sales came in at 3 which is an 8 month low for the index. This number was off an estimate of 30 and prior reading of 37. Gbp/Usd trades at 1.6165.

Gbp/Usd tests 200 hour m/a Posted: 24 Feb 2011 12:29 AM PST Gbp/Usd tested its 200 hour m/a of 1.6146 in recent trade and could not break below. Short term resistance lies at 1.6165 which is the 61.8% fibo of move from 1.6272 down to 1.6099. Stronger resistance should come in at 1.6201 where the 100 hour m/a lies.

Swiss employment level up 1.2% for the year Posted: 24 Feb 2011 12:20 AM PST Swiss employment level y/y came in at 1.2%, inline with expectations. The number of people employed is 4.086 million, just above the 4.085 million estimate, Usd/Chf has been trading close to session lows in recent trade and is currently at .9380. Eur/Chf trades at 1.2735.

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