Forex Market Updates & Commentary

Michigan Sentiment & Business Inventories Both Fall
NO effect in Hawaii from tsunami
USDJPY stays offered in range bound trading
Feds Dudley talks about the good and bad
First signs of tsunami to be known in Hawaii soon
Retail Sales look pretty good even without the gas effects
Retail Sales Data Same as Forecast
Bobbys Corner-Open Market-March.11.2011
Listen to the market. Event Risk is increased
Retail Sales Data Due at 8:30AM
USDCAD moves higher after weaker employment
UK PPI
German Final CPI
BOJ comments to ensure financial market stability
Japanese earthquake affects currency markets

Michigan Sentiment & Business Inventories Both Fall

Posted: 11 Mar 2011 07:03 AM PST

NO effect in Hawaii from tsunami

Posted: 11 Mar 2011 06:22 AM PST

According to news services.

USDJPY stays offered in range bound trading

Posted: 11 Mar 2011 06:19 AM PST

The USDJPY seems to be staying calm with a downward bias as the market sorts through the emotion and market implications of the tragedy in Japan. The USDJPY has a negative bias - falling through the 100 day MA at 82.62.

The price has also moved through the 100 hour MA (blue line in the hourly chart above) at the 82.63. It has moved through the trendline support at the 82.53 level, through the 200 hour MA (green line in the chart above) at the 82.37 level and has been able to hold the 200 hour MA (green line in the chart above) .

The 200 hour MA is obviously the key level the market seems to be focused on today. The level has been tested over the least 3 or so hours and each time the price has found willing sellers. This is significant - especially on a day like today where the event news is unpredictable (is there another aftershock, is there another tsunami, does the nuclear power plan leak, what is the insurance effect, is it worse or better than expectations. No one really knows for sure. This is the source of event risk, etc).

When event risk is increased, it is my belief that traders need to define their trading risk. Risk is defined by using tools that give bullish and bearish bias. The charts show a negative bias. The price is below MAs, trendlines and has held retracement levels. That negative bias continues until the price is able to move above levels like the 200 hour MA.

Listen to what the market is saying by using tools to define risk. The news is impossible to predict. The price and the tools that filter those price moves, are able to give clear definable borderline levels that traders can use to their advantage.

So where is support?

The support does come in at 81.93 area. If you look at the daily chart below this area has a number of changes of support and resistance over the last 6 or so months of trading

Feds Dudley talks about the good and bad

Posted: 11 Mar 2011 05:41 AM PST

Core inflation is now stabilized
Inflation expectations are well anchored
Commodity prices increase temporarily
Must not be overly optimistic about growth prospects
Fed still far away from achieving dual mandate
Needs sustained employment growth
Job growth to increase considerably more rapidly

Optimistic but cautiously optimistic. His comments suggest the market is moving in the right direction but it is not near what is normal for the Fed (full employment and stable inflation). Inflation has its risks, but the employment situation is a ways from the 5-6% that Bernanke talks about as normal.

First signs of tsunami to be known in Hawaii soon

Posted: 11 Mar 2011 05:38 AM PST

Retail Sales look pretty good even without the gas effects

Posted: 11 Mar 2011 05:35 AM PST

Retail Sales rise 1.0% vs 0.7% last month
Ex-autos sales rose by 0.7% vs 0.6% last month
Ex-autos & gas 0.6% vs 0.5% last month
Ex-gas rose 0.9% vs 0.6% last month
Ex-autos & build mat. rose 0.7% vs 0.8% last month
Ex-food service rose 0.9% vs 0.8% last month
Ex-build mat., auto dlrs rose 0.7% vs 0.7% last month
Ex-gas, bldg mat, dlrs(*) rose 0.6% vs 0.6% last month

Overall, sales were strong across all measures. The price increase in energy boost the values but if you take out things like gas, the pace is still positive. Servoce station sales rose by 1.4% in February reflecting the higher prices.

Retail Sales Data Same as Forecast

Posted: 11 Mar 2011 05:31 AM PST

Advance Retail Sales: Survey: 1.0% Actual: 1.0% Prior: 0.3% Revised: 0.7%

Core Retail Sales: Survey: 0.7% Actual: 0.7% Prior: 0.3% Revised: 0.5%

Bobbys Corner-Open Market-March.11.2011

Posted: 11 Mar 2011 05:25 AM PST

Good Morning:

This morning (2:46 PM local time in Japan) an earthquake hit the island nation. The earthquake registered 8.9 on the Richter scale. This is the largest ever recorded in Japan, and the sixth largest on record. It is too early to tell the exact damage and costs that the earthquake will have. There is a tsnuami warning in the Pacific rim-including Hawaii.

Now to the markets:

JPY strengthened after this morning’s earthquake-as investors domestic demand for the safe have on the Yen fueled the rally. The Yen usually benefits from times of uncertainty. With continued unrest in the Middle East, sovereign debt problems in the Euro Zone , and now a record breaking earthquake in Japan-the markets are to say the least nervous and uncertain.

Today we have data on US Retail Sales,Consumer Confidence and Business Inventories.

World equity markets are lower-and US Futures are pointing to a lower opening this morning.
Oil dropped down to the $100/bar after Japan’s earthquake. Refiners have shut down production as a precaution. Japan is the 3rd largest importer of oil in the world. Speculation that demand for crude will be lower in the near future aided the decline.

Oil:$100.33 Gold:$1412.30

TIME FOR EST. PRIOR

8:30A.M. ADVANCE RETAIL SALES FEB. 1.00% 0.30%

8:30A.M. RETAIL SALES LESS AUTOS FEB. 0.70% 0.30%

8:30A.M. RETAIL SALES EX AUTO & GAS FEB. 0.50% 0.20%

9:55A.M. U. OF MICHIGAN CONFIDENCE FEB. 76.5O 77.5O

10:00A.M. BUSINESS INVENTORIES JAN. 0.80% 0.80%

HAVE A GREAT DAY-WEEKEND & GOOD LUCK

Listen to the market. Event Risk is increased

Posted: 11 Mar 2011 05:24 AM PST

The devastation in Japan requires our thoughts and prayers (you choose which one or both if you prefer to focus on). The markets meanwhile continue with the story that repatriation of flows back to Japan are occurring. The implications for the other currencies are up in the air. So the best thing to do is listen to the market. Listen to the prices and the tools that define bullish or bearish bias. If you do, and a trend develops you will be on it. It also allows you to define your risk. So be smart. Be prepared. Listen to the market. In the report I look at the technical levels that stick out for me in the major currency pairs.

Retail Sales Data Due at 8:30AM

Posted: 11 Mar 2011 04:57 AM PST

USDCAD moves higher after weaker employment

Posted: 11 Mar 2011 04:38 AM PST

The New Change in Employment came in at 15.1K jobs added versus expectations of 25.0 The Unemployment rate came in at 7.8% vs 7.7%. The Full time employment fell by -23.8K jobs and Part TIme Employment rose by 38.9K.

The USDCAD moved to new highs on the move and stalled near the high reached on February 28th (0.9787). The price moved above the 38.2% retracement target of 0.9777. This is the retracement of the move down from the high on February 23rd to the low on March 9th. The high came in at 0.9789 and has moved lower. The price is below the 0.9777 now but remains above the 38.2% of the days range at 0.9764. If this level can hold the price has the potential to regroup and head higher. A move below this level will likely attract buying at the 0.9748-55 level.