Forex Market Updates & Commentary

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• The USDJPY moves lower on the weak ISM
• ISM Non Manufacturing comes in weaker at 52.8.
• USDCHF continues its move to new lows
• ISM Non Manufacturing due at 10 AM ET
• EU source says Portugal bailout details being sorted out
• GBPUSD tests Fibonacci Retracement at 1.6554
• Gold tests 100 hour MA at 1541.80
• EURUSD making new highs. Tests channel resistance
• Feds Rosengren says lower US dollar not having an impact
• Pimco Gross says Australia or Canada the place to go…
• Bobbys Corner-Open Market-May.4.2011
• The NY Opening Forex Commentary for May 4th
• ADP Employment Change Worse
• Boston Fed President Rosengren on the Wires
• ADP Employment Change Figures Due 8:15

The USDJPY moves lower on the weak ISM Posted: 04 May 2011 07:07 AM PDT The low after the USDJPY intervention day on March 18th 2011 came in at the 80.69 and this level has been breached. The move below this level should solicit additional selling pressure. The next target off the hourly chart is the 80.44 level. This represents the channel trendline for the pair (see the chart above).  Below that level could see the price move toward the 79.89 level which is the 61.8 retracement of the move up from the March 17th low to the high reached on April 7th.

ISM Non Manufacturing comes in weaker at 52.8. Posted: 04 May 2011 07:00 AM PDT Dollar moves lower on the initial move. This is the lowest since August 2010. New orders are the lowest since Dec 2009 Components are weaker as well. Composite Index       52.8 vs  57.3 last month  Business Activity     53.7 vs  59.7 last month  Prices Paid           70.1 vs 72.1 last month New Orders            52.7 vs 64.1 last month Backlog of Orders *   55.5 vs 56.0 last month Supplier Deliveries*  53.0 vs  51.5 last month Inventory Change *    55.5 vs 55.5 last month Inventory Sentiment*  57.5 vs 67.0 last month Employment            51.9 vs  53.7 last month New Export Orders *   53.5 vs 59.0 last month Imports*              57.0 vs 50.0 last month

USDCHF continues its move to new lows Posted: 04 May 2011 06:59 AM PDT

ISM Non Manufacturing due at 10 AM ET Posted: 04 May 2011 06:55 AM PDT The expectation is 57.5 vs 57.3 Last month the components were: Composite Index       57.3 Business Activity     59.7 Prices Paid           72.1 New Orders            64.1 Backlog of Orders *   56.0 Supplier Deliveries*  51.5 Inventory Change *    55.5 Inventory Sentiment*  67.0 Employment            53.7 New Export Orders *   59.0 Imports*              50.0 New Orders and Employment are always eyed for the change.

EU source says Portugal bailout details being sorted out Posted: 04 May 2011 06:54 AM PDT 75 to 90 billion Euros said to be the total aid given the bank needs

GBPUSD tests Fibonacci Retracement at 1.6554 Posted: 04 May 2011 06:18 AM PDT The 38.2% of the sharp 2 day move down comes in at 1.6554. The market tested the level and has found some profit taking sellers. The GBPUSD hsa been under pressure on the back of more dovish comments from BOE King this week. Weaker PMI also contributed to the weakness.  Today, PMI Construction came out weaker as did Mortgage approvals.  Despite the weaker data, the GBPUSD was not able to push below the 50% of the move up from the April 18th low to the high reached on April 28th.  That level came in at 1.6454 (see chart below).  100 pips later the topside target is tested.

Gold tests 100 hour MA at 1541.80 Posted: 04 May 2011 06:13 AM PDT Gold is up testing the 100 hour MA at the 1541.80 level.  A move above this level will next target 1545.27 then 1550.93.  If the MA holds look for a rotation back down to the 1538.82 to be support. If this level should hold, the bulls will be in control. IF broken, a further correction down should occur as the market continues its consolidation.

EURUSD making new highs. Tests channel resistance Posted: 04 May 2011 05:50 AM PDT The EURUSD has reached new highs on the back of the weaker ADP data and the more dovish comments from Fed’s Rosengren. The pair has been consolidating for the last 5 trading days. The next target from the hourly/daily is the 1.4965. This is a level going back to the last time the market was at these levels. Above that the 1.4989 (the Fibonacci extension level). On the 5  minute chart the pair is frinding some resistance at the channel support at 1.4925.  A move above this level will be needed.

Feds Rosengren says lower US dollar not having an impact Posted: 04 May 2011 05:42 AM PDT …on domestic inflation. He also adds that lending data is still quite weak.  He comments that the Fed would need to react to a surge in bank lending. His comments have been more dovish overall suggesting in his mind the Fed is not near tightening. He is not a voting member on the FOMC this year.

Pimco Gross says Australia or Canada the place to go… Posted: 04 May 2011 05:39 AM PDT …for high grade bonds. The AUDUSD has support against the 200 hour MA at the 1.0841 level.

Bobbys Corner-Open Market-May.4.2011 Posted: 04 May 2011 05:35 AM PDT Good Morning: FX markets had a busy overnight session: Speculation that both the ECB and Chinese Central Bank are considering interest rate increases are weighing heavily on the markets. Stocks dropped for a second day-and US Futures are pointing to a weak opening this morning.  Commodities also dropped, as oil, gold, silver, copper all lost ground. Portugal agreed to the terms of a bailout worth about 78 billion euros.  12 billion euros will be used for the recapitalization of the country’s banks.  The conditions of the bailout were better than Portugal initially had requested-maybe the EU realizes it needs to be reasonable with it deficit reduction initiatives for member countries with sovereign debt issues. The news helped keep the single currency firm, as investors are more positive that Portugal can service a 4.2 billion euro bond repayment due in June 2011. Markets are starting to keep a lower profile ahead of this Friday’s US employment data. This morning’s ADP report printed lower than expected-with a slight upward revision for the prior month. Oil:$110.83                                                                      Gold:$1535.80 TIME   FOR EST. PRIOR 8:15A.M. ADP EMPLOYMENT CHANGE  APRIL 198K 201K 10:00A.M. ISM NON-MANF COMPOSITE  APRIL 57.5O 57.30 HAVE A GREAT DAY & GOOD LUCK

The NY Opening Forex Commentary for May 4th Posted: 04 May 2011 05:24 AM PDT

ADP Employment Change Worse Posted: 04 May 2011 05:20 AM PDT Employment Change:  Survey: 198K    Actual: 179K    Prior: 201K    Revised: 207K April vs March ADP Employment  108,474   vs   108,295 Level Change:     179  vs  207

Boston Fed President Rosengren on the Wires Posted: 04 May 2011 05:10 AM PDT Says: Sees ‘no reason’ to slow economy with tighter policy Fed’s current policy stance ‘is appropriate’ ‘Significant slack in labor markets’ ‘Stable inflation expectations’ Core inflation is well below long-run target U.S. recovery ‘undesireably’ slow, tentative Fed shouldn’t tighten to combat ’supply shocks’ Needs to monitor inflation ‘very closely’ Inflation at about 2% over ‘medium term’ Recent oil price volatility ’quite striking’ Most supply shocks transitory over past 25 years He would react ‘forcefully’ against inflation

ADP Employment Change Figures Due 8:15 Posted: 04 May 2011 05:04 AM PDT

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