Forex Market Updates & Commentary

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• USDJPY between trendline resistance and MA support below
• GBPUSD trades at new lows for the day
• S&P says no lower risk for AAA sovereigns in the EU
• EURUSD moves closer to next targets
• ECBs Bonnici says ECB policy is accomodative
• US China Talks. Geithner comments come over newswires
• German Government advisor Bofinger says has to change approach to the countries at risk
• The NY Forex Call for May 11th 2011
• S&P downgrades Greece to B from BB-
• Canada Housing starts come in at 179K units
• Trichet says Global Recovery confirmed
• EU situation keeps the EURUSD on edge
• Canada Housing Starts Data Due at 8:15AM
• USD/CAD finding some hourly resistance @ .96517
• E/Z Sentix Investor confidence

USDJPY between trendline resistance and MA support below Posted: 09 May 2011 07:47 AM PDT The USDJPY held topside trendline resistance earlier today and has rotated back down to the 100 hour MA support. The pair is unsure of the next directional break and will instead look for the break to confirm the bias. Watch the key levels for clues and look for momentum on a break of either the top or the bottom.

GBPUSD trades at new lows for the day Posted: 09 May 2011 07:34 AM PDT The GBPUSD ha moved sharply lower with the daily trendline support at the 1.6219 and the 38.2% retracement of the move up from the Dec 2010 low to the high coming in at 1.6209 as being major support targeted. The hourly chart has support coming in at the 1.6254 level. This is the channel support for the pair.

S&P says no lower risk for AAA sovereigns in the EU Posted: 09 May 2011 07:31 AM PDT They acknowledge the Greece downgrade is on the fear of restructuring. They do not see a downgrade of Irish debt.

EURUSD moves closer to next targets Posted: 09 May 2011 07:20 AM PDT S&P downgrade, Greece concerns and comments from Greek officials has the EURUSD back on the defensive and moving toward the next target at the 1.4205 level. This is the 61.8% of the move up from the March 11th low to the high reached last week. On the 5 minute chart the pair is moving toward support against teh 1.4264 level.  Holding the level could lead to some short covering with the 1.4297 topside trendline resistance (and moving lower). A move above this trendline is needed to solicit any additional buying for the pair.

ECBs Bonnici says ECB policy is accomodative Posted: 09 May 2011 07:13 AM PDT …It is conceivable that interest rates could go higher.  He comments that he is leaning toward the hawkish side.

US China Talks. Geithner comments come over newswires Posted: 09 May 2011 06:15 AM PDT Says China Wang realizes China success depend on US ties Focused on the practical, the achieveable China/US needs to work together Geithner confident on more progress in ties with China

German Government advisor Bofinger says has to change approach to the countries at risk Posted: 09 May 2011 05:54 AM PDT For instance, need to talk about stimulus measures for Greece in addition to belt tightening. He also says that a comprehensive plan must be enacted if the EU is to remain intact over the next 12 months. This runs counter to what the ECB is doing through tightening. Bofinget is one of 5 “wise men” who advises German Chancellor Angela Merkel.  Whether he should be talking at this juncture is questionable.  Nevertheless, the comments (along with the S&P downgrade) has sent to EURUSD to new lows on the day and a move to the low from Friday at 1.4315. On the daily chart, the EURUSD has downside room to roam with the 38.2% retracement of the move higher from the 2011 low to high range coming in at the 1.4150 level.

The NY Forex Call for May 11th 2011 Posted: 09 May 2011 05:46 AM PDT

S&P downgrades Greece to B from BB- Posted: 09 May 2011 05:17 AM PDT The EURUSD is little changed;

Canada Housing starts come in at 179K units Posted: 09 May 2011 05:16 AM PDT Thsi si lower than expectations (184K) and lower than last months 185.1 (Revised lower from 188.8)

Trichet says Global Recovery confirmed Posted: 09 May 2011 05:02 AM PDT No double dip seen Emerging economies growing faster than advanced Potential for overheating in emerging economies Commodity volatility a concern Anchoring of price expectations is key Must avoid second round effects Saudi Arabia is ready to supply oil mkt appropriately He also declines to comment on Greece

EU situation keeps the EURUSD on edge Posted: 09 May 2011 04:38 AM PDT There is no discussion at the moment to restructure the debt or change the interest rates. Talk of Greece leaving the EU are not true.  EU is under pressure to revise Irish debt.  All keep the markets on edge. The EURUSD is up on the day(1.4351 close) as it waits and sees.

Canada Housing Starts Data Due at 8:15AM Posted: 09 May 2011 04:24 AM PDT

USD/CAD finding some hourly resistance @ .96517 Posted: 09 May 2011 02:41 AM PDT The USD/CAD sold off continually since the opening of the trading week, and found a bottom at .96031. Since then, the pair has rebounded and is almost back to .96597; where we found it at yesterdays open. However, it seems that we are seeing some resistance at .96517, which is where we find the 50.0% line on the move from Friday’s high to today’s low. If some upward progress can be made through here, the 61.8% is the next target.

E/Z Sentix Investor confidence Posted: 09 May 2011 01:35 AM PDT Sentix Investor Confidence comes in at 10.9, weaker than the 13.8 expected and prior reading of 14.2. Eur/Usd had sold off going into the release of this figure. The pair has since returned to 1.4435.

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