Forex Market Updates & Commentary

---

• USDCAD tests underside of trendline
• Silver coiling for a move
• Greece to announce an additional 6 B Euro of austerity
• EURUSD not done with the selloff. Moves toward 100 hour MA
• Hearing an earthquake in Japan…
• Canada Leading Indicators Rise, Wholesale Sales Fall Lower
• Feds Bullard says a lot of moving pieces at the Fed
• The NY Opening Forex Call for May 18th is available for viewing
• GBPUSD is testing 100 day MA at 1.6133
• ECB Nowotny says step by stop moving to normal monetary policy
• Canada Leading Indicators, Wholesale Sales Data Due at 8:30AM
• Former PBOC adviser Fan Gang says it is possible, but difficult, for China to raise rates.
• MPC May Meeting Minutes
• U.K claimant count change 12.4K; worse than the 0.4K forecast and 0.7K prior reading
• IMF’s Thomsen comments on Greece

USDCAD tests underside of trendline Posted: 18 May 2011 06:45 AM PDT The USDCAD has rallied higher today after the failure above the 100 day MA yesterday sent the pair lower yesterday and into the first 10 hour of trading today. The move higher has peaked at 0.9758 which corresponds with the underside of the trendline on the hourly chart above. The ability to stay below this level puts gives the shorts a reason to trade where risk can be defined. The pair’s inability to make a move below the 100 hour MA (blue line in the chart above) keeps the pair torn between the bulls and the bears. SO look for sellers above to be buyers below (against support).

Silver coiling for a move Posted: 18 May 2011 06:24 AM PDT Silver has consolidated in a narrow range over the last 7-8 hours. The low has been $34.34. The high has extended to $34.87. The support has held the 100 hour MA at the $34.35 level. This gives the pair a bullish bias. A move above the $34.87 level is eyed for clues as will be an increase in momentum break. What we know is the pair is coiling for a move. The bias clues are to the upside. Will we get the break confirmation? Risk is defined.

Greece to announce an additional 6 B Euro of austerity Posted: 18 May 2011 06:10 AM PDT This is being said by Greece’s Papacontantinou. Adds that Greece will achieve deficit target of 7.5% of GDP but that there is no magic restructuring scenarios that can take Greece out of crisis. Firings in the Public sector eyed to shrink the deficit.

EURUSD not done with the selloff. Moves toward 100 hour MA Posted: 18 May 2011 06:07 AM PDT The EURUSD took another step lower after holding up against support at the 1.4217 area in the early NY session. The move below the level next targets the 1.4185-95 area where trendline, 100 hour MA and the 38.2% retracement of the weeks range is found. The pair this week has a low of 1.4048 to 1.4286 with the extension to the 200 hour MA last night. The failure to breach the “confirming” moving average is indicative of a market which was not ready to extend higher. As a result, the pair is what I call “trading between the Goal Posts” with the goal posts being the 100 and 200 bar/hour MAs. The market will eventually break above or below one of the MA. In the meantime look for traders to buy against the 100, and sell against the 200.

Hearing an earthquake in Japan… Posted: 18 May 2011 05:48 AM PDT The USDJPY finding support at the 100 bar MA on the 5 minute chart. A move above the 81.21 increases the pairs bullishness. A move below the 100 bar MA should solicit more selling.

Canada Leading Indicators Rise, Wholesale Sales Fall Lower Posted: 18 May 2011 05:30 AM PDT Leading Indicators:  Survey:  0.6%   Actual: 0.8%   Prior: 0.8%  Revised:  0.6% April vs March (Leading Indicator Components) Housing Index:  -0.4%  vs  2.0% Bus Service Employment:  0.4%  vs  -0.1% S&P/ TSX Stock Index: 1.5%  vs  2.2% Money Supply:  0.5%  vs  0.4% U.S. Composite:  0.7%  vs  0.7% Average Work Week:  0.3%  vs  0.0% New Orders, Durables:   0.5%  vs  -0.5% Shipment/Inventory:  0.02%  vs  0.01% Furniture, Appl Sales:  0.4%  vs  0.1% Other Durable Sales:  -0.2%  vs  -0.1% Wholesale Sales:  Survey: 1.2%   Actual: 0.1%   Prior: -0.6%   Revised: -0.9%

Feds Bullard says a lot of moving pieces at the Fed Posted: 18 May 2011 05:22 AM PDT Says Fed Monetary policy is very easy Fed should track headline inflation /not Core Jump in commodity prices is vexing Mkts have rational expectations Need to see more data before changing policy Inflation expectations are not running away Favors a balance sheet first policy after pause (implies not raising rates but lessening the Feds balance sheet) Expectst the Fed to 1st allow assets to decrease

The NY Opening Forex Call for May 18th is available for viewing Posted: 18 May 2011 05:21 AM PDT

GBPUSD is testing 100 day MA at 1.6133 Posted: 18 May 2011 04:42 AM PDT The pair has not been below the 100 day MA since January 12th 2011. Look for buyers against the area with a stop on a move below. There is support on a break next at the 1.6088 level which is trendline support (see chart above).

ECB Nowotny says step by stop moving to normal monetary policy Posted: 18 May 2011 04:40 AM PDT Growth and inflation may trigger further rate steps. He also says that a Greek restructuring is not in the discussion

Canada Leading Indicators, Wholesale Sales Data Due at 8:30AM Posted: 18 May 2011 04:24 AM PDT

Former PBOC adviser Fan Gang says it is possible, but difficult, for China to raise rates. Posted: 18 May 2011 02:53 AM PDT

MPC May Meeting Minutes Posted: 18 May 2011 01:36 AM PDT Recovery in demand from net trade disappointing. Vote 6-3; BOE asset purchase vote was 8-1. Few signs CPI is feeding into higher expectations. Consumption growth is likely to be weak for some time. Sees near-term inflation outlook has worsened. Euro-area crisis could weight on U.K. demand. Emerging economies and mid-east unrest may boost oil prices. Majority said rate hike could affect consumer confidence. Inflation still likely to ease in medium term. Members wanting hike saw “little benefit” in waiting.

U.K claimant count change 12.4K; worse than the 0.4K forecast and 0.7K prior reading Posted: 18 May 2011 01:32 AM PDT Average earnings was 2.3%; better than expected, and the unemployment rate was slightly better at 7.7%

IMF’s Thomsen comments on Greece Posted: 18 May 2011 01:07 AM PDT Needs ‘reinvigorate” reform program, “largely achieve’ first year. Program will run off track without determined effort by Greece. GDP this year about 1% lower than expected. There is question of whether Greece can return to markets next year. Deficit will not go much below 10% of GDP without reforms.

You are subscribed to email updates from Forex News and Commentary by FXDD To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610