Saturday, May 21, 2011

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

The Forex Week Ahead from FXDD

Posted: 20 May 2011 02:02 PM PDT

The EURUSD is getting hit at the end of the NY day

Posted: 20 May 2011 12:56 PM PDT

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The position squaring has forced the EURUSD down quite sharply in the last hour of trading. There is no new news to support the move.  A close below the 1.4150 level which represents the 38.2% of the 2011 low to high range would not look good from a technical perspective.

CFTC Commitment of Traders weekly report

Posted: 20 May 2011 12:33 PM PDT

Net Long Japanese Yen: 15,373   vs 13,054 last week  (Weaker US$ raised)
Net Long Euro:41,645 vs   61,447 last week    (Weaker US$ trimmed)
Net Long Australian Dollar: 50,919 vs   60,321  last week    (Weaker US$ trimmed)
Net Long Swiss Franc:15,661  vs  16,336   last week    (Weaker US$ trimmed)
Net Long Canadian Dollar: 26,291 vs   37,203   last week   (Weaker US$ trimmed)
Net Short British Pound: -928    18,118  last week    (Stronger US$ trimmed)
Net Long Mexican Peso:104,912   118,065   last week    (Weaker US$ trimmed)
Net Long New Zealand Dollar: 12,624    13,714   last week   (Weaker US$ trimmed)

This report is released each week and shows the net position of traders in the market. It is thought to be a counter indicator for the likely direction of the market although this may not pan out and positions change throughout the week. This is just a snap shot.

As a example, the position in the JPY is long and the position got larger during the week.  (so the USDJPY position got more short during the last week of trading). If the assumption of the interpretation is true, the market is short USDJPY and this may lead to a short covering rally next week.

The EURUSD position is net long EURUSD. However, compared to last week the position is less.  This week the EURUSD rallied higher so some profit was likely taken on the net position.

Next weeks Forex webinars

Posted: 20 May 2011 11:56 AM PDT

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Next weeks Forex webinars - Please register for the ones you plan to attend.

Monday - Week ahead in the Forex 9:30am with Greg, Bill and Shawn - Register

- Forex Basics 4pm with Shawn and Jason - Register

Tuesday  -The Traders Course Lesson 06 - 6 Attirbutes of Successful Traders - Register

Forex Wrap up Friday Rebroadcast May 20 2011

Posted: 20 May 2011 10:30 AM PDT

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Forex Wrap up Friday Watch the Rebroadcast

Greece says the Fitch downgrade ignores additional fiscal measures

Posted: 20 May 2011 08:46 AM PDT

They also say it is influenced by press. 

The mud gets thrown back and forth.

France’s Largarde says Greece is in danger of default

Posted: 20 May 2011 08:34 AM PDT

She adds that Greece is too slow on privatization and any restructuring of Greek debt is out of the question.  She adds however, that a volutary restructuring of debt by banks would be acceptable. The question is will they want to restructure.

This is the level that the EURUSD should hold

Posted: 20 May 2011 08:28 AM PDT

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In a trend move like we have seen from the NY high I want to see the legs of the trend, hold around the 38.2% retracement levels. Doing so, gives traders confidence that the “big players” believe in the move and supporting the move and want to see the trend continue.

Earlier today, the price moved lower and corrected 38.2%. Now the same level is being tested at the 1.4184 area.  I would want to see that level hold and start another leg down, to keep the trend and bears fully in charge.

Fitch downgrades Greece to B+. EURUSD extends move lower

Posted: 20 May 2011 07:34 AM PDT

This continues to send the EURUSD lower.  The EURUSD’s next target is 1.4121. Below that the 1.4095 is the underside of an old trendline on the hourly chart below. The low for the week was on Monday at the 1.4047 level.   Is it out of the question? The steps lower will decide. 

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On the topside now, the 1.4186 level is the 38.2% of the last leg to the downside.  Earlier in the day the price held the 38.2% of the move up from the initial low.  This was a clue that the bias remained bearish. 

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Traders should  respect the move as the technical picture deteriorated.  A move above the 38.2% on the 5 minute chart takes the pressure off, but the bulls have the burden of proof now.

Looking at the daily chart a move and close below the 1.4150 level (38.2% of the 2011 range) will give the market a sour taste into the weekend and new week.

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Respect the move until proven otherwise

Posted: 20 May 2011 07:30 AM PDT

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Just when I thought the market was done, there was a comment that Norway would stop an aid payment to Norway and suddenly the price started to fall with more momentum.  The price move lower has broken through the floor over the last few days at the 1.4196-1.4205 area and this move has to be respected. Unless the price is able to move back above these levels, the bias is to the downside.

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