Forex Market Updates & Commentary

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• “The Traders Bookshelf” on FXStreet. I will be talking about Attacking Currency Trends tomorrow 11 AM ET
• EURUSD continues trend day alive
• NY Morning Forex Commentary for May 24th
• The Forex Week Ahead
• ECB’s Ordonez
• EUR/JPY receiving support from previous lows
• Fitch analyst says no change seen at the moment for outlook or rating on Italy.
• EU’s Rehn
• SNB declines to comment on currency market intervention
• Eurozone manufacturing PMI: 54.8, Services PMI 55.4
• German man. PMI 58.2, serv. was 54.9
• German data at 3:30
• EUR$ completes full hourly retracement
• ECB’s Nowotny
• ECB’s Weidmann

“The Traders Bookshelf” on FXStreet. I will be talking about Attacking Currency Trends tomorrow 11 AM ET Posted: 23 May 2011 06:11 AM PDT The interview will occur tomorrow at 10:00 AM ET/15:00 GMT.  I look forward to the interview, and thank the people at FXStreet for asking me to kick off this new exciting program for the retail trader.  You do need to register to attend.   Go to: http://www.fxstreet.com/webinars/sessions/session.aspx?id=eaaa26d5-8293-4aff-bbdd-fc7e007c3d18

EURUSD continues trend day alive Posted: 23 May 2011 05:30 AM PDT The EURUSD moved lower on Friday - staying below the 100 bar MA on the 5 minute chart. The opening today came in below the 1.4150 level which is the 38.2% of the 2011 low to high range. The price never rose above this level and has continued the trend down today. In the last hour or so, there was the most serious correction of the day. The price moved up to test the 100 bar MA (see 5 minute chart above) and the 38.2% of the move down from today’s high at the 1.4036 (high reached 1.4038). Momentum dies, and the price has moved back below the 1.4000 level. The next key level of support for the pair comes in at the key 100 day MA. That level comes in at the 1.3966 level and was tested this morning at 1.3968. The initial bounce off the key level held and I would expect a battle against the level should the price decline continue in the NY session. A move below, however, should not be taken lightly. The price has been above the key moving average since February 15th.

NY Morning Forex Commentary for May 24th Posted: 23 May 2011 05:00 AM PDT

The Forex Week Ahead Posted: 23 May 2011 04:26 AM PDT

ECB’s Ordonez Posted: 23 May 2011 02:56 AM PDT Spain has to recognize it has problems; must tackle massive unemployment. International financial crisis is not Spain’s biggest problem, deep spending cuts are necessary in Spain. Spanish central gov’t and regional gov’t must meet deficit target. Caja restructuring to be completed as forseen; Spain bank problems affect part of system. Inability of Eu to solve problems partly to blame  for higher financing costs. Spain can only cut risk premium with reforms. Spain’s spread over 200 BPS cannot be accepted for a long time.

EUR/JPY receiving support from previous lows Posted: 23 May 2011 02:48 AM PDT We’ve seen a sell-off in the euro against all of the major currencies this session. See here, the pair was testing resistance at the 200 hour moving average and then moved lower and completed a full hourly retracement. Following that, the pair has sold off another 100 points where it appears to have found some support from 113.85; a previous support level. If the rebound continues, we look back towards 114.90 as the target.

Fitch analyst says no change seen at the moment for outlook or rating on Italy. Posted: 23 May 2011 02:14 AM PDT

EU’s Rehn Posted: 23 May 2011 01:42 AM PDT We must be firmer in implementing reform. Economic recovery in Europe is maintaining momentum. Growth is becoming more balanced, self-sustained. There is no Euro crisis; it is a crisis of states. Have contained crisis to three countries. Needed to prevent Greek default to avoid downward spiral. Greece has to seriously reinforce budget steps, structural reforms before new steps taken. Expects Greek government to announce new steps shortly.

SNB declines to comment on currency market intervention Posted: 23 May 2011 01:31 AM PDT

Eurozone manufacturing PMI: 54.8, Services PMI 55.4 Posted: 23 May 2011 01:01 AM PDT The Composite index fell to 55.4 from 57.8 and below the expectations of 57.3.  Overall the PMI data was weaker with Germany also showing lower than expected falls with PMI Manufacturing down to 58.2 from 62 (expected 61) and PMI services coming in at 54.9 from 56.8 (expected 57.0).

German man. PMI 58.2, serv. was 54.9 Posted: 23 May 2011 12:29 AM PDT

German data at 3:30 Posted: 23 May 2011 12:27 AM PDT

EUR$ completes full hourly retracement Posted: 23 May 2011 12:24 AM PDT The USD opened the weak firmer from weekend trading; 20 points firmer against the Euro. Since the open the pair has traded continually lower and completed the full retracement from the low of 1.40475 on the 16th to Friday’s high of 1.43446. Since reaching a low of 1.40204 following a poor French manufacturing number, the pair has rebounded slightly.

ECB’s Nowotny Posted: 23 May 2011 12:12 AM PDT Shouldn’t only look at “problematic” countries. Germany is particularly encouraging. Risks of L or W shaped recovery have decreased. Better global outlook could reinforce Europe. Countries didn’t manage budgets in good times. reasonable, balanced reform package is needed. More emphasis on anti-cyclical policies.

ECB’s Weidmann Posted: 23 May 2011 12:06 AM PDT Sees need to separate fiscal and monetary policy. German economic recovery is “remarkable”. German economy in “good shape”. Upswing is “broad based”. Euro consumer price show ’significant” jump. Need to closely monitor risk of 2ns round effects. Need to take gain in long term inflation expectations seriously. Inflation expectations show signs of worsening price outlook. ECB monetary policy remains “expansionary”. Must exit as soon as financial markets recover.

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