Forex Market Updates & Commentary

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• USDJPY does not like housing
• Silver maintains support above trendline
• US Pending Home Sales fall sharply.Temp factors cited but fundamentals remain weak.
• Mexico Central Bank Overnight Rate Unchanged
• Get your webinar on – Greg and Shawn – TODAY at 12:30pm Be there
• Michigan Consumer Confidence comes in better at 74.3 better than preliminary
• Dip buyers in USDCHF look for some confidence from technicals
• German Finance Minister Schaeuble says unrealistic to expect growth >2-3%
• Greek minority government leader Karatzaferis says little agreeement at meetings
• EURUSD falls back lower. Tests the trendline again
• The EURUSD is testing trendline resistance at 1.4292
• IMF Lipsky says they have ample resources to respond to needs
• Personal Spending and Income up 0.4%
• USDCHF stays below channel.
• ECB Provopoulos: ECB monitoring inflation risk very closely

USDJPY does not like housing Posted: 27 May 2011 07:24 AM PDT The USDJPY fell sharply on the back of the much weaker Pending Home sales. The price has bottomed above the low for the day and looks to correct toward the 100 bar MA on the 5 minute chart. Shorts would like to see the 81.04 level to provide resistance with a rotation back down needing to get below the  80.87 and then the low for the day at 80.81

Silver maintains support above trendline Posted: 27 May 2011 07:18 AM PDT Silver has been pushing higher, supported along a trendline at $37.79.  The price is trying to establish volume above the 37.96 level which was the high ceiling  from May 25th.  Stay above $37.70 and move above the 37.96 high and the upsdie has more reasons to push higher with the high for the week at 38.87 the next target.

US Pending Home Sales fall sharply.Temp factors cited but fundamentals remain weak. Posted: 27 May 2011 07:06 AM PDT The MoM decline reached -11.6% vs -1% expectations.  Bad weather may have contributed to the decline.  The month was the 10th wettest April with 875 reports of tornados – a record. The industry nevertheless remains hurt by foreclosed sales and bank reluctance to lend.   All cash deals accounted for 31% of transactions and distressed properties, including foreclosures and short sales made up 37% of the sales. 1.8 million home are said to be dilinquent for more than 90 days.  This is in addition to 3.87 million homes on the market. Home prices have fallen 33% since the peak in 2006.

Mexico Central Bank Overnight Rate Unchanged Posted: 27 May 2011 07:02 AM PDT Mexico central bank has decided to keep its overnight rate unchanged at 4.50%

Get your webinar on – Greg and Shawn – TODAY at 12:30pm Be there Posted: 27 May 2011 07:00 AM PDT Get your webinar on TODAY at 12:30pm – Greg and Shawn will teach the Friday Forex Wrap show at 12:30pm TODAY. Join us for the last show of the week. >> Register now.

Michigan Consumer Confidence comes in better at 74.3 better than preliminary Posted: 27 May 2011 06:55 AM PDT Inflation outlook falls for the 1st time since September 2010 Consumer confidence 74.3 Economic Conditions 81.9 Economic Outlook 69.5 Inflation expectations 1 year ahead: 4.1% vs 4.4% 5 Year Ahead: 2.9% vs 3%

Dip buyers in USDCHF look for some confidence from technicals Posted: 27 May 2011 06:40 AM PDT The USDCHF has held below the underside fo the trendline since breaking earlier today. The price is trying to base and test this level again. The level currently comes in at the 0.8582 level.  The price will need to push above this level in order to give the dip buyers any satisfaction. Understand though that staying below the level keeps the bears in charge as the trend down remains the traders bias.

German Finance Minister Schaeuble says unrealistic to expect growth >2-3% Posted: 27 May 2011 06:22 AM PDT He adds there is a good chance for 2011 jobless below 3 milion workers and adds it would be a grave mistake to leave path of budget consolidation now.

Greek minority government leader Karatzaferis says little agreeement at meetings Posted: 27 May 2011 06:20 AM PDT Reuters adds that Greek Political leaders fail to come to an agreement.

EURUSD falls back lower. Tests the trendline again Posted: 27 May 2011 06:12 AM PDT The EURUSD broke above the channel trendline for the second time today and the price has come back down. The pair is back testing the old trendline and a move back into the channel will not be a good sign for the EURUSD.  The level comes in at 1.4241 currently. The upside did test the trendline on the daily chart and the profit taking sellers used the resistance as a level to sell against.

The EURUSD is testing trendline resistance at 1.4292 Posted: 27 May 2011 05:36 AM PDT The EURUSD has extended higher after moving back above the channel trendline  on the hourly chart (see chart below).  This was the second attempt above this channel on that chart, with the first attempt failing and rotating back down (see below). The pair is now up testing the upside trendline on the daily chart at the 1.4292 level (see trendline in chart above) and will need a  break above this trendline to continue the bullish move.  Above this level, the high from Friday becomes the next target at the 1.4338-1.4344 area.

IMF Lipsky says they have ample resources to respond to needs Posted: 27 May 2011 05:33 AM PDT They are in conversation with Greece.

Personal Spending and Income up 0.4% Posted: 27 May 2011 05:30 AM PDT PCE Core comes in as expected at 0.2% MoM The Personal Income and spending was revised lower to 0.4% (from 0.5%) and 0.5% (from 0.6%)

USDCHF stays below channel. Posted: 27 May 2011 05:25 AM PDT The USDCHF broke below channel support today and fell sharply to new lows at 0.8531 (old low at 0.8551). The price rebounded back above the 0.8551 prior low but the correction higher stalled at the underside of the old channel. The failure to extend back above this resistance level has led to a rotation back to the downside and is now testing the 0.8551 level again. The bias for the USDCHF remains to the downside for the USDCHF as better data (despite the high currency) and calls for increased rates by the IMF yesterday, keep the buyers interested. A move above the trendline in the chart above changes the bias but until then, the downside bears remain in charge.

ECB Provopoulos: ECB monitoring inflation risk very closely Posted: 27 May 2011 05:05 AM PDT All options open on interest rates Policy stance remains accomodative

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