Forex Market Updates & Commentary

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• US Wholesale Inventories Stays True to Survey
• Fed’s Lockhart on the Wires
• Bobbys Corner-Open Market-April.8.2011
• US Wholesale Inventories Data Due at 10AM
• Canadian Unemployment
• U.K. leading index 0.6%; higher than prior reading
• Cable moves through previous daily high following PPI release
• UK March PPI; output rises 0.9%, input rises 3.7% from prior month
• GBPUSD pushes higher to new weeks highs but runs into channel resistance
• EURUSD tests the next topside resistance at the 1.4399
• German trade surplus rises to 12.1B, however weaker than 13.0B estimate
• Swiss unemployment 3.3% as expected
• JPY economy watchers sentiment 27.7; worse than expected
• BOJ’s Noda on the wires
• 4-8 Economic Calender

US Wholesale Inventories Stays True to Survey Posted: 08 Apr 2011 07:01 AM PDT

Fed’s Lockhart on the Wires Posted: 08 Apr 2011 06:18 AM PDT Says: ECB move has no particular influence on FED Fed funds would be raised together in exit Global rate differential can affect dollar Not prepared to speculate on exit sequence U.S. banks ‘not heavily exposed’ to Europe Concerned excessive exit talk may send wrong signal Feb monitoring sovereign debt issue in Europe Europe has potential spillover on banking in U.S. MBS market has improving ability to handle sales

Bobbys Corner-Open Market-April.8.2011 Posted: 08 Apr 2011 05:53 AM PDT Good Morning: We start tocb,iday with President Obama demanding a budget deal being agreed on-as a US government showdown looms on the horizon. The US government will shut down at midnight tonight if no deal is reached. If no agreement is reached-the US will shut down all non-essential agencies, and will furlough 800,000 federal employees. This would be the first shutdown in 15 years, and would close national parks, IRS paper tax returns would be unprocessed, passport services would be closed, along with a slew of other government services. The Euro rose versus the greenback as investors feel the ECB will slowly increase interest rates to curb inflation in the EU. With the outlook being that the Federal Reserve will trail other central banks in raising rates-the USD will remain under pressure as the interest rate differential increases between the US and Europe.  Analysts feel that the Bank of Japan will also keep interest rates low for at least the next 12 months-as they need to stimulate an economy that was already slow-and has slowed more since the March 11 earthquake. It seems that negative short tem news is being ignored and investors are focused on a longer term growth philosophy.  This is being seen in the commodity, Forex, and equity markets. Gold reached a record high of $1473.07/oz, and Oil touched$111.90/barrel.  Commodities in general also rallied. World equity markets rallied, and US Futures are higher this morning. Oil:$111.50                                                  Gold:$1473.00 TIME  FOR EST. PRIOR   REVISED 10:00A.M. WHOLESALE INVENTORIES FEB. 1.00% 1.10% 1.00% HAVE A GREAT DAY-WEEKEND & GOOD LUCK

US Wholesale Inventories Data Due at 10AM Posted: 08 Apr 2011 05:20 AM PDT

Canadian Unemployment Posted: 08 Apr 2011 04:01 AM PDT Employment Change- Survey: 27.8K   Actual: -1.5K   Prior: 15.1K Unemployment Rate- Survey: 7.7%   Actual: 7.7%   Prior: 7.8%

U.K. leading index 0.6%; higher than prior reading Posted: 08 Apr 2011 02:05 AM PDT

Cable moves through previous daily high following PPI release Posted: 08 Apr 2011 01:40 AM PDT On the back of better than expected PPI data out of the U.K. the GBP/USD moved higher through the previous daily high of 1.63992; making a new high of 1.64267. Seen below the next significant level higher is 1.64558; the high from January 19th, 2010. A positive CB leading index reading (due out in less than 20 minutes) could be the boost the pair needs.

UK March PPI; output rises 0.9%, input rises 3.7% from prior month Posted: 08 Apr 2011 01:34 AM PDT Output came in at 0.9%, stronger than the 0.6% gain expected. Input came in at 3.7%, stronger than the 2.2% expected. Gbp/Usd strengthened on news, making a new session high of 1.6427. The pair currently resides at 1.6415.

GBPUSD pushes higher to new weeks highs but runs into channel resistance Posted: 08 Apr 2011 12:43 AM PDT The GBPUSD has moved higher today but has run into trendline channel resistance and are seeing some rotation back to the downside.  I will be looking for the 38.2% of the days range to hold support now at the 1.6379 level. If the level can hold any corrective moves, the bulls should remain in control. However, a move back above the 1.6400 level might provide some resistance.  Nevertheless the move higher has been quite robust with the price pushing above early March 2011 high at 1.6342 and the mid March high at the 1.6397 area (see daily chart below).  In between, those two levels is the high for the current week at the 1.6362 level.  A break of 1.6379 would next look to this level for support.

EURUSD tests the next topside resistance at the 1.4399 Posted: 07 Apr 2011 11:49 PM PDT The EURUSD has resumed the climb today, led higher on the back of the break of the bull flag at the 1.4310 level in the Far East session (see chart above at 3). This led to the next surge higher. The pair has found resistance against the next topside trendline at the 1.4399 level currently (see hourly chart below).  A move above this level is now needed to ignite even more buying for the pair.  On the daily chart, should the topside resistance be broken at the 1.4399 level, the next key target for the pair comes in at the 1.4469 area where the channel trendline currently is located.  Despite the concerns about the Portuguese debt, the market is more focused on the higher trajectory of ECB rates it seems. The technical picture also keeps forcing any shorts to be shortlived.   The current resistance nevertheless give traders a  reason to take profit or try yet another short.  If a momentum develops above the 1.4400 level, those shorts might be forced to cover once again.

German trade surplus rises to 12.1B, however weaker than 13.0B estimate Posted: 07 Apr 2011 11:04 PM PDT German trade surplus rose to 12.1B from the prior month’s reading of 10.1B. A 13.0B reading was expected. The market has not read this as negative news as Eur/Usd continues to trade either side of 1.4390.

Swiss unemployment 3.3% as expected Posted: 07 Apr 2011 10:54 PM PDT The CHF softened slightly on the release.

JPY economy watchers sentiment 27.7; worse than expected Posted: 07 Apr 2011 10:09 PM PDT

BOJ’s Noda on the wires Posted: 07 Apr 2011 09:11 PM PDT * calls forcontinued G7, G20 cooperation * BOJ is taking appropriate monetary policy measures to deal with economic challenges * will compile 1st extra budget; has not decided on its scale

4-8 Economic Calender Posted: 07 Apr 2011 09:08 PM PDT

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