Forex Market Updates & Commentary

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• Downgrade in Japan? Weak US data sends USDJPY back down instead
• US Consumer Confidence falls sharply too
• Chicago PMI comes in weaker at 56.6 versus expectations of 62 (last 67.6)
• NZDUSD keeps bullish bias but watch 0.8260 above.
• USDCAD falls below the support at the 0.9698
• Bank of Canada keeps rates unchanged
• US Case Schiller due at 9:00 AM ET, Chicago PMI at 9:45 AM and Consumer Confidence at 10:00 AM ET
• Canada Industrial Product Prices rise less, but Raw prices surge
• The Traders Course TODAY at 4pm – Technical Indicators
• BOC Interest Decision at 9:00 AM
• The NY Opening Forex Commentary is available for viewing
• Spanish Finance Minister says half of Spains regions not on track for budget targets
• ECB’s Tumpel-Gugerell
• USD/CAD hourly support @ .96984
• Irish minister says markets will not start funding ireland until ECB has new financing structures

Downgrade in Japan? Weak US data sends USDJPY back down instead Posted: 31 May 2011 07:09 AM PDT Earlier today, Moody’s warned that Japan might be downgraded. This led to a sharp rise in the USDJPY. Now the weak US data has led to a reversal in the pair as focus comes right back on the weakening US economy.  The pair fell back down to the 100 hour MA at the 81.28 level. The  50% of the move up from the low today comes in at the 81.23 level. The low has reache 81.24.  A move below these levels will open the door for further downside potential now.   Watch the 81.36 level for close upside resistance now.  Above that a move above the 81.46 level would be a signal that the trading waters are muddy.

US Consumer Confidence falls sharply too Posted: 31 May 2011 07:02 AM PDT Falls to 60.8 from 66 revised from 65.4 originally. The expectations for this month was for a rise to 66. Present situaion 39.3 vs 40.2 Expectations: 75.2 vs 83.2 Labor Differential: -38.3 vs -37.3 (Jobs plentiful minus jobs hard to get.  A more negative says that jobs are harder to find) Business Conditions (Present): Good 14.6% vs 15.5% Bad: 37.1% vs 35.9% Normal: 48.2% vs 48.6% Business Conditions (Expectations – 6 months forward) Better: 17.0 vs 19.2% Worse: 15.5% vs 14.0% Same: 67.5% vs 66.8%

Chicago PMI comes in weaker at 56.6 versus expectations of 62 (last 67.6) Posted: 31 May 2011 06:45 AM PDT Prices paid  78.6  vs 81.8 last month  Production  56.0  vs 70.0 last month  New orders  53.5 vs  66.3 last month Order backlogs  51.7  vs 62.4 last  month  Inventories   61.6  vs 53.5 last  month  Employment  60.8  vs 63.7 last month  Supplier deliveries  63.8 vs 68.4 last month

NZDUSD keeps bullish bias but watch 0.8260 above. Posted: 31 May 2011 06:37 AM PDT The NZDUSD surged higher today after consolidating during holiday trading on Monday.  The pair continues to make new highs and although the headwinds exist from the large currency gains on economic exports, there are benefits from lower import prices and demand for NZ exports.  In a trending market like the NZDUSD, you need a “reason” to sell.  If the reason does not pan out (i.e., an old high, a trendline broken, etc), the trade should be closed as trends are directional and trending markets tend to move fast.  Looking at the daily chart, the price has reached  a target level at the 50% Fibonacci Expansion at the 0.8260 level.  This is derived from measuring the move up from the March low to the May high and measuring Fibo extensions from the corrective low.  In short, half the move up from March, added to the corrective low in May, measures to the 0.8260 level.  The high today has reached 82.59.  This could be a clue that a top may be in place. However, a move above 0.8260 will negate the bearish clue.  The bull trend will resume. Looking at the hourly chart, the move to the high today also corresponded with the underside of channel trendline (broken as a result of the non-trending move yesterday- see chart below) . The ability to hold that level is a clue that profit takers entered the market. The correction came down to the parellel trendline off the channel from the May 24th low (again see chart below).  So although there is a “reason” to sell against the 0.8260 level off the daily and hourly charts, the inability to break the channel trendline below, keeps the bulls in charge. Sellers against the 0.8260 level have a few “reasons” to sell. A break above the level, however, should lead to further momentum (this is a key level for today with price above bullish/price below bearish) and should not be ignored.  If the price level can hold,  a move below the channel trendline on the hourly chart currently at the  0.8217 level will be needed to confirm the potential for further downside momentum.  Until then, the bulls are likely to remain in charge of the trend.

USDCAD falls below the support at the 0.9698 Posted: 31 May 2011 06:13 AM PDT Although the BOC reiterated its assessment that the higher C$ was a headwind, the USDCAD has moved lower. Oil prices are up over $2.50 which is contributing to the decline as well.  The price fell through support at the 0.9698 which reflected the 38.2% retracement of the move up from the May 11th low to the high. That level will now act as resistance with the 0.9662 level being the next target for the pair.

Bank of Canada keeps rates unchanged Posted: 31 May 2011 06:01 AM PDT Some stimulus to be eventually withdrawn Commodity prices to remain high Rate rise to be carefully considered Economy still has material excess supply Increased risk from peripheral Europe Economic recovery is largely as expected Risk of greater headwinds from strong C$ Inflation to be above 3% in the short term Below is the press release that accompanied the announcement Ottawa - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The global economic recovery is proceeding broadly as expected in the Bank's April Monetary Policy Report (MPR). The U.S. economy continues to grow at a modest pace, limited by the consolidation of household balance sheets. Growth in Europe is maintaining momentum, although the risks related to peripheral economies have increased. The disasters that struck Japan in March are severely affecting its economic activity and causing temporary supply chain disruptions in advanced economies. Commodity prices have declined recently but are expected to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets. These high prices, combined with persistent excess demand conditions in major emerging-market economies, are contributing to broader global inflationary pressures.  Despite the challenges that weigh on the global outlook, financial conditions remain very stimulative.  In Canada, the economic expansion is proceeding largely as expected in the April MPR. The economy grew at an annual rate of 3.9 per cent in the first quarter, reflecting continued strong business investment, smaller contributions from household and government spending, and a modest drag from net exports. Although temporary supply chain disruptions are expected to restrain growth sharply in the current quarter, this is expected to be unwound in subsequent quarters. While underlying inflation is relatively subdued, the Bank expects that high energy prices and changes in provincial indirect taxes will keep total CPI inflation above 3 per cent in the short term. Total CPI inflation is expected to converge with core inflation at 2 per cent by the middle of 2012 as excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored. The possibility of greater momentum in household borrowing and spending in Canada represents an upside risk to inflation. On the other hand, the persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered.

US Case Schiller due at 9:00 AM ET, Chicago PMI at 9:45 AM and Consumer Confidence at 10:00 AM ET Posted: 31 May 2011 05:52 AM PDT Housing prices continue to show weakness as foreclosed homes continue to keep pressure on the prices. Data due at 9:00 AM ET CHICAGO PMI is due at 9:45 with the expectations of a decline down to 62.5 from 67.6 Consumer Confidence is expected to show a rise to 66.30 from 65.40.  Michigan Consumer Confidence rose to 74.3 from 72.4 in the preliminary report.  Keeping US confidence is important for growth to continue its upward trajectory.

Canada Industrial Product Prices rise less, but Raw prices surge Posted: 31 May 2011 05:32 AM PDT The Industrial Product prices for April rose by 0.5% vs 0.7% while the Raw Material price Index rose by 6.8% which was much higher than the 3% expected. The Raw Material Price increase is a reflection of higher commodity prices and comes on the back of a large 5.8% increase in March. The Bank of Canada will announce its interest rate decision at 9:00 ET.

The Traders Course TODAY at 4pm – Technical Indicators Posted: 31 May 2011 05:28 AM PDT   The Traders Course TODAY at 4pm – Technical Indicators and what to do with them.  Join Greg Michalowski and Shawn Powell for an informative class on the basics of using technical indicators in MT4.  Today at 4pm.   Register now

BOC Interest Decision at 9:00 AM Posted: 31 May 2011 05:26 AM PDT The BOC interest rate decision is due at 9:00 AM. The expectation is for a no change in rates. The comments accompanying the announcement will be eyed by the market. The comments from the last report included the following highlights: the global economic recovery is becoming more firmly entrenched and is expected to continue at a steady pace Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which is being further reinforced by supply shocks arising from recent geopolitical events Broader global inflationary pressures Recent economic activity in Canada has been stronger than the Bank had anticipated, the profile is largely consistent with the underlying dynamics outlined in the January Report Aggregate demand is rebalancing toward business investment and net exports, and away from government and household expenditures Business Investment should continue to rise rapidly Consumer spending is expected to evolve broadly in line with disposable income Net exports should be restrained by ongoing competitiveness challenges which has been reinforced by the recent strength of the C$ GDP 2.9% in 2011 GDP 2.6% in 2012 GDP 2.1% in 2013 Temporary factors to increase inflation to around 3% in the 2nd quarter before converging to the 2% target i 2012 Core inflation has fallen further in recent months in part due to temporary factors. Core inflation is expected to rise to 2% in the middle of 2012 as excess supply in the economy slowly absorbed The persistent strength of the C$ could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker than expected net exports and larger declines in import prices

The NY Opening Forex Commentary is available for viewing Posted: 31 May 2011 05:11 AM PDT

Spanish Finance Minister says half of Spains regions not on track for budget targets Posted: 31 May 2011 04:47 AM PDT Tax receipts up 4% through April The reiterate that they stand by the budget deficit targets

ECB’s Tumpel-Gugerell Posted: 31 May 2011 02:50 AM PDT Not the case that ECB will soften stance on restructuring, re-profiling not an option. Have new forecasts soon, but confident inflation expectations remain anchored. Major part of money market gone back to normal functioning.

USD/CAD hourly support @ .96984 Posted: 31 May 2011 02:41 AM PDT With the past 3 hourly candlesticks, the pair has found possible support from the .96984 level; we have not seen trading below this level since May 20th. If support holds, .9739 is our target.

Irish minister says markets will not start funding ireland until ECB has new financing structures Posted: 31 May 2011 02:21 AM PDT

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Forex Market Updates & Commentary

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• EURUSD steady and unchanged on the day
• USDCAD maintains firm support. Tests 100 hour MA
• Canada GDP Better, Annualized a Touch Lower
• Canada GDP & Current Account Due at 8:30AM
• Russian central bank unexpectedly raised deposit rate to 3.5% from 3.25%; the fourth increase since December.
• Swedish finance minister says there can be no talk of extending Greek debt maturities until the country achieves a budget surplus.
• 5-30 Calender
• EURUSD opens higher but moves down from there

EURUSD steady and unchanged on the day Posted: 30 May 2011 06:14 AM PDT The EURUSD moved higher on the opening but has been below those level since and currently is near the 4 PM closing price of 1.4278 on Friday.   The price low dipped below and old trendline on the hourly chart (see chart above) but the price moved back higher soon thereafter. In the latest hour, the price dipped below the support line again, but it is more from time moving on, rather than extreme market selling. Needless to say, the market is steady within a narrow range. The low came in at 1.4256. The high came in at 1.43207.  The 65 pip range would normally make me look for a range extension but with the quiet and steady markets as a result of holidays in the UK and US, the momentum may be hard to find. Trendline is at 1.4275. Use that as a borderline with bullish above/bearish below.  The target on the downside is to get through the 1.4257 level.  Below that the next target would look toward the 1.4204 area. ON the topside, the 1.4292 level is the next key level to get through. This has been the ceiling price over the last 9 hours of trading.

USDCAD maintains firm support. Tests 100 hour MA Posted: 30 May 2011 05:47 AM PDT The Canada GDP on a quarterly annualized basis came in a touch weaker than expected although the MoM was a bit better.  What balanced that out was the prior month was down by 0.1%. So the MoM data balanced out. The Current Account for the 1st quarter meanwhile was much weaker at -8.9B from -7.2B expected. The combination has forced the USDCAD higher. The pair has good support against the floor trendline and the 200 hour MA (green line in the chart above).  Those levels come in at 0.97516 and 0.9748.  On the topside, traders should watch the 100 hour MA for clues. That level is represented by the blue line in the chart above and it currently comes in at 0.9779 level.  A move above this level should lead to further upside potential.  The 0.9784/89 highs from NY trade on Friday and the high for today are not far behind and other levels to breach to give the bulls more upside confidence.  Last week, the week was largely a consolidation period that moved the price above the 100 day MA, but momentum could not be established.  The 100 day MA today comes in at the 0.9753 level. With the low at 0.97504, this keeps the bulls in charge for the time being.

Canada GDP Better, Annualized a Touch Lower Posted: 30 May 2011 05:32 AM PDT Quaterly GDP Annualized:  Survey: 4.0%   Actual: 3.9%   Prior: 3.3%  Revised: 3.1% Gross Domestic Product (MoM):   Survey: 0.2%  Actual: 0.3%   Prior: -0.2  Revised: -0.1% Gross Domestic Product (YoY):  Survey: 2.6%  Actual: 2.8%   Prior: 2.9%  Revised: 3.0% Current Account:    Survey: -7.2B  Actual: -8.9B   Prior: -11.0B   Revised:  -10.3B

Canada GDP & Current Account Due at 8:30AM Posted: 30 May 2011 04:53 AM PDT

Russian central bank unexpectedly raised deposit rate to 3.5% from 3.25%; the fourth increase since December. Posted: 30 May 2011 12:45 AM PDT The move was forecasted by 9 of 20 economists in a Bloomberg survey. Benchmark kept at 8.25%. Move was made due to continuing inflation expectations and risk to stable growth. Says lower money supply growth in May will contribute to lower inflation in the future.

Swedish finance minister says there can be no talk of extending Greek debt maturities until the country achieves a budget surplus. Posted: 30 May 2011 12:30 AM PDT

5-30 Calender Posted: 29 May 2011 09:07 PM PDT

EURUSD opens higher but moves down from there Posted: 29 May 2011 04:10 PM PDT The EURUSD opened higher and moved above the trendline in the daily chart, but the price action has not been supportive. The price is looking to test that trendline in the daily chart with a move below the 1.4277 level having the potential of increasing the disappointment in the upside move. The next target would be the 1.4254 level which would bring the price back in the channel from Tuesday to Thursday.

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Forex Market Updates & Commentary

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• The NY Weekend Forex Commentary is available for viewing
• EU warns Greece that time is running out for austerity program
• USDJPY following the script to the downside
• Greek Minority Leader says bailout deal is killing economy
• FXDD quoted in print edition of Wall Street Journal: Friday May 27th 2011
• EURUSD bouncing as London/Europe prepare for weekend.
• Gold moves to new week highs above the 1532
• EUs Juncker says situation in Greece is tense and difficult

The NY Weekend Forex Commentary is available for viewing Posted: 27 May 2011 01:57 PM PDT

EU warns Greece that time is running out for austerity program Posted: 27 May 2011 10:48 AM PDT

USDJPY following the script to the downside Posted: 27 May 2011 08:43 AM PDT As per the prior post, (CLICK HERE), the USDJPY did not like the housing data. The correction found sellers against he 81.04 level and has moved below the 80.87 and low for the day at 80.81.  The next target comes in at the 80.65-69 area where the trendline support is now found on the hourly chart. Staying below the 80.87 level now keeps the bears in charge. The market will likely feel comfortable with short positions as long as the price can remain below this level.

Greek Minority Leader says bailout deal is killing economy Posted: 27 May 2011 08:13 AM PDT He adds it must be renegotiated. He says need tax rate reduction for growth. He will not consent to austerity plan.

FXDD quoted in print edition of Wall Street Journal: Friday May 27th 2011 Posted: 27 May 2011 08:12 AM PDT

EURUSD bouncing as London/Europe prepare for weekend. Posted: 27 May 2011 07:59 AM PDT The EURUSD has held the 200 bar MA for the second time and the price has pushed back higher. The earlier highs from the day at the  1.4277 level is the next target for the pair. The high for the day is trendline resistance on the daily chart (see chart below).

Gold moves to new week highs above the 1532 Posted: 27 May 2011 07:44 AM PDT Gold has moved above the high for the week (at 1532) and moved to test channel resistance.  The market has found some sellers against the level as perhaps traders are happy to take some profit against the borderline level before the weekend (see chart above).  A move back below the 1532 level should keep new buyers cautious but the failure to extend should encourage some additional profit takers against the trendline above (see chart above).   What would help confirm profit taking potential is a move below the 1531 level. This level corresponds with the broken trendline on the channel from the 5 minute chart (see 5 minute chart above). SO far the price decline from the high has respected this trendline. A break below should see some profit taking before the weekend with a target of 1527 where the 38.2% of the move higher is found along with the 100 bar MA on this chart (blue line).  With the price remaining above these levels, the bulls remain in charge.

EUs Juncker says situation in Greece is tense and difficult Posted: 27 May 2011 07:29 AM PDT Yesterday, Juncker caused a stir when he commented that the IMF may not make a support payment for Greece next month.  This sent the EURUSD sharply lower. He adds that they are awaiting the assessment from IMF. No indications on the results of the “Trioca Report”

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Forex Market Updates & Commentary

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• USDJPY does not like housing
• Silver maintains support above trendline
• US Pending Home Sales fall sharply.Temp factors cited but fundamentals remain weak.
• Mexico Central Bank Overnight Rate Unchanged
• Get your webinar on – Greg and Shawn – TODAY at 12:30pm Be there
• Michigan Consumer Confidence comes in better at 74.3 better than preliminary
• Dip buyers in USDCHF look for some confidence from technicals
• German Finance Minister Schaeuble says unrealistic to expect growth >2-3%
• Greek minority government leader Karatzaferis says little agreeement at meetings
• EURUSD falls back lower. Tests the trendline again
• The EURUSD is testing trendline resistance at 1.4292
• IMF Lipsky says they have ample resources to respond to needs
• Personal Spending and Income up 0.4%
• USDCHF stays below channel.
• ECB Provopoulos: ECB monitoring inflation risk very closely

USDJPY does not like housing Posted: 27 May 2011 07:24 AM PDT The USDJPY fell sharply on the back of the much weaker Pending Home sales. The price has bottomed above the low for the day and looks to correct toward the 100 bar MA on the 5 minute chart. Shorts would like to see the 81.04 level to provide resistance with a rotation back down needing to get below the  80.87 and then the low for the day at 80.81

Silver maintains support above trendline Posted: 27 May 2011 07:18 AM PDT Silver has been pushing higher, supported along a trendline at $37.79.  The price is trying to establish volume above the 37.96 level which was the high ceiling  from May 25th.  Stay above $37.70 and move above the 37.96 high and the upsdie has more reasons to push higher with the high for the week at 38.87 the next target.

US Pending Home Sales fall sharply.Temp factors cited but fundamentals remain weak. Posted: 27 May 2011 07:06 AM PDT The MoM decline reached -11.6% vs -1% expectations.  Bad weather may have contributed to the decline.  The month was the 10th wettest April with 875 reports of tornados – a record. The industry nevertheless remains hurt by foreclosed sales and bank reluctance to lend.   All cash deals accounted for 31% of transactions and distressed properties, including foreclosures and short sales made up 37% of the sales. 1.8 million home are said to be dilinquent for more than 90 days.  This is in addition to 3.87 million homes on the market. Home prices have fallen 33% since the peak in 2006.

Mexico Central Bank Overnight Rate Unchanged Posted: 27 May 2011 07:02 AM PDT Mexico central bank has decided to keep its overnight rate unchanged at 4.50%

Get your webinar on – Greg and Shawn – TODAY at 12:30pm Be there Posted: 27 May 2011 07:00 AM PDT Get your webinar on TODAY at 12:30pm – Greg and Shawn will teach the Friday Forex Wrap show at 12:30pm TODAY. Join us for the last show of the week. >> Register now.

Michigan Consumer Confidence comes in better at 74.3 better than preliminary Posted: 27 May 2011 06:55 AM PDT Inflation outlook falls for the 1st time since September 2010 Consumer confidence 74.3 Economic Conditions 81.9 Economic Outlook 69.5 Inflation expectations 1 year ahead: 4.1% vs 4.4% 5 Year Ahead: 2.9% vs 3%

Dip buyers in USDCHF look for some confidence from technicals Posted: 27 May 2011 06:40 AM PDT The USDCHF has held below the underside fo the trendline since breaking earlier today. The price is trying to base and test this level again. The level currently comes in at the 0.8582 level.  The price will need to push above this level in order to give the dip buyers any satisfaction. Understand though that staying below the level keeps the bears in charge as the trend down remains the traders bias.

German Finance Minister Schaeuble says unrealistic to expect growth >2-3% Posted: 27 May 2011 06:22 AM PDT He adds there is a good chance for 2011 jobless below 3 milion workers and adds it would be a grave mistake to leave path of budget consolidation now.

Greek minority government leader Karatzaferis says little agreeement at meetings Posted: 27 May 2011 06:20 AM PDT Reuters adds that Greek Political leaders fail to come to an agreement.

EURUSD falls back lower. Tests the trendline again Posted: 27 May 2011 06:12 AM PDT The EURUSD broke above the channel trendline for the second time today and the price has come back down. The pair is back testing the old trendline and a move back into the channel will not be a good sign for the EURUSD.  The level comes in at 1.4241 currently. The upside did test the trendline on the daily chart and the profit taking sellers used the resistance as a level to sell against.

The EURUSD is testing trendline resistance at 1.4292 Posted: 27 May 2011 05:36 AM PDT The EURUSD has extended higher after moving back above the channel trendline  on the hourly chart (see chart below).  This was the second attempt above this channel on that chart, with the first attempt failing and rotating back down (see below). The pair is now up testing the upside trendline on the daily chart at the 1.4292 level (see trendline in chart above) and will need a  break above this trendline to continue the bullish move.  Above this level, the high from Friday becomes the next target at the 1.4338-1.4344 area.

IMF Lipsky says they have ample resources to respond to needs Posted: 27 May 2011 05:33 AM PDT They are in conversation with Greece.

Personal Spending and Income up 0.4% Posted: 27 May 2011 05:30 AM PDT PCE Core comes in as expected at 0.2% MoM The Personal Income and spending was revised lower to 0.4% (from 0.5%) and 0.5% (from 0.6%)

USDCHF stays below channel. Posted: 27 May 2011 05:25 AM PDT The USDCHF broke below channel support today and fell sharply to new lows at 0.8531 (old low at 0.8551). The price rebounded back above the 0.8551 prior low but the correction higher stalled at the underside of the old channel. The failure to extend back above this resistance level has led to a rotation back to the downside and is now testing the 0.8551 level again. The bias for the USDCHF remains to the downside for the USDCHF as better data (despite the high currency) and calls for increased rates by the IMF yesterday, keep the buyers interested. A move above the trendline in the chart above changes the bias but until then, the downside bears remain in charge.

ECB Provopoulos: ECB monitoring inflation risk very closely Posted: 27 May 2011 05:05 AM PDT All options open on interest rates Policy stance remains accomodative

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Forex Market Updates & Commentary

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• ECB Paramo says Greece has resources to solves its problems
• EU Juncker says IMF may not release Tranche for Greece next month
• BOE Tucker very worried about inflation.
• EU Juncker says Greece won’t reach 2011 budget goals
• USDCHF tests channel support line at 0.8648
• ECB Bini Smaghi says growth in Euro nations sluggish
• GBPUSD rises above the 1.6337. Targets 1.6370 and 1.6400
• USDCAD moves higher on lower USD growth
• USDJPY falls on lower GDP and higher Initial Claims
• GDP Stays Same as Prior, Jobless Claims Rise
• EURUSD awaits GDP/Initial Claims
• The NY Morning Forex Commentary for May 26th 2011
• US Jobless Claims & GDP Data Due at 8:30AM
• EU’s Van Rompuy
• Trichet speaks in Berlin

ECB Paramo says Greece has resources to solves its problems Posted: 26 May 2011 07:20 AM PDT He adds that talk of leaving the EU is absurd.  He also says that Greece need to privatize more of its state owned businesses..

EU Juncker says IMF may not release Tranche for Greece next month Posted: 26 May 2011 06:57 AM PDT Further, that IMF needs 12 month Greek Refinancing guarantee and that governments unable to make up IMF portion. This news has sent the EURUSD lower and is now moving below 200 hour MA support at the 1.4163 level (and 50% at 1.4157).  This turns the bias back to the downside.

BOE Tucker very worried about inflation. Posted: 26 May 2011 06:35 AM PDT Sends the GBPUSD higher A move above targets the 50% off the daily chart at the 1.6400 level.

EU Juncker says Greece won’t reach 2011 budget goals Posted: 26 May 2011 06:29 AM PDT He adds that they need ambitious privitization program. The problem is that the privitization is not all that easy to do when the ship is sinking.  How do you privatize with no buyers?

USDCHF tests channel support line at 0.8648 Posted: 26 May 2011 06:19 AM PDT The channel trendline target at the 0.8648 level should provide support for the USDCHF and will be eyed by the market.  Risk is limited and defined at the level which may solicit some profit taking.  Although weak US dats/strong Swiss Trade data support the CHF strength/USD weakness. The pair continues to get hit on the back of slow growth/flight into safety like the CHF.  In addition, the Trade Surplus increased today to 1.52 Billion for the month of April with exports up 7.9% and imports up 4.0%.  This is not necessarily congruent with an economy suffering from a strong currency  (or at least what you would expect).

ECB Bini Smaghi says growth in Euro nations sluggish Posted: 26 May 2011 06:04 AM PDT Euro growth differentials are significant Nations must stick to adjustment programs ECB to support if nations stick to plans Monetary policy cannot take up fiscal slack Central banks cannot provide solvency slack There is no alternative to reforms Crisis showed growing pains of EURO Earlier today Trichet was talking and said: ECB ready to do what’s needed to fulfill mandate Recovery moe firmly establishe d in recent months Must anchor inflation expectations Non standard tools don’t impinge tighter rate policy Upside risk to medium term inflaton outlook Current crisis is not a crisis of the EURO I get the feeling that the ECB is getting tired with Greece. Trichet is more focused on inflation for sure as it seems the Greece situation is only solved by making deep cuts in their nations spending.  Rate moves by the ECB will do little one way or the other.

GBPUSD rises above the 1.6337. Targets 1.6370 and 1.6400 Posted: 26 May 2011 05:56 AM PDT The GBPUSD has moved above the 1.6337 level and looks toward the the next target at the 1.6370 level (topside resistance on the hourly chart below) and above that the 1.6400 level  (50% of the move down from the April high to the May low).  Support below now at the 1.6333 level and below that the 1.6320 level.

USDCAD moves higher on lower USD growth Posted: 26 May 2011 05:42 AM PDT The dollar does benefit against the CAD$ on the back of the weaker US data. The thought is that if the US slows Canada will suffer more. The 100 hour MA (blue line in the chart above at 0.9766 currently) has held support over the last few days and remains the support for the pair. The 100 day MA is also a key level. That comes in at the 0.9758 level today.

USDJPY falls on lower GDP and higher Initial Claims Posted: 26 May 2011 05:32 AM PDT The consumption is down. Inventories up. Higher oil slows consumption. The Initial Claims are showing signs of weakening. The USDJPY has fallen in response and tests the lows for the day. The next target to get through is the 81.61.   The EURUSD is higher with the 61.8% at the 1.4201 the next key target for the pair. Overall, although the dollar is lower, the move is not all that large.

GDP Stays Same as Prior, Jobless Claims Rise Posted: 26 May 2011 05:31 AM PDT GDP (Annualized):   Survey: 2.2%   Actual: 1.8%   Prior: 1.8%     First Quarter vs Fourth Quarter Profits with inventory and capital adjustments:  1.3%   vs   2.3% Tax Liability:                         7.8%  vs   -0.3% Profits after tax with inventory and capital adjustments:  -0.9%  vs  3.3% Divedends:                               2.1%  vs  1.2% Undistributed Profits:       -5.4%  vs  6.5% Personal Consumption:   Survey: 2.8%   Actual: 2.2%   Prior: 2.7%   GDP Price Index:   Survey: 1.9%   Actual: 1.9%   Prior: 1.9%   Core PCE QoQ:   Survey: 1.5%   Actual: 1.4%   Prior: 1.5%  Initial Jobless Claims:   Survey: 404K   Actual: 424K  Prior: 409K   Revised: 414K Continuing Claims:   Survey: 3700  Actual: 3690K   Prior: 3711   Revised: 3736K

EURUSD awaits GDP/Initial Claims Posted: 26 May 2011 05:24 AM PDT The 200 hour MA comes in at the 1.4161. The midpoint of the move down from last Friday’s high comes in at 1.4156.

The NY Morning Forex Commentary for May 26th 2011 Posted: 26 May 2011 05:15 AM PDT

US Jobless Claims & GDP Data Due at 8:30AM Posted: 26 May 2011 04:25 AM PDT

EU’s Van Rompuy Posted: 26 May 2011 03:10 AM PDT G-8 will talk about global economy and middle east. Reasons for cautious optimism on Eurozone, adding Obama will update G-8 on plans to curb US deficits. Won’t let EU fail. Greek government determined to meet promises, and that he is confident Greece will take all necessary steps to meet fiscal goals. Will do everything to avoid Greed default, and credit event on Greece. IMF could be involved in future funding for Greece.

Trichet speaks in Berlin Posted: 26 May 2011 02:35 AM PDT ECB’s primary mandate is price stability. “More needs to be done” to address crisis. Focus on reducing government debt right direction. Current crisis is not a crisis of the Euro. Need more automaticity in sanction mechanisms. Non-standard tools don’t require tighter rate policy. Liquidity and interest rates are separate tools. Carefully monitoring inflation, ready to do whatever is necessary to fulfill mandate. With the recovery more firmly established, have witneseed emergence of upside risks to inflation outlook. have to avoid commodity price increases leading to second-round effects.

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