Forex Market Updates & Commentary

---

• Lower ISM sends USDJPY and USDCHF lower yet
• ISM Data Comes in a Bit Weaker, Construction Spending Up with a Poor Revision
• EURUSD not in play today…yet
• USDCHF extends downside fall in sharp move lower
• Trichet financial crisis can strike suddenly
• GBPUSD falls to new lows.
• ECB Mersch says debt restructuring very unlikely
• ISM Data Due at 10AM
• USDJPY falls hard on weak ADP
• EU’s Rehn Speaks in NY
• Rehn says EU must ensure Greece is finance in medium term
• ADP Employment Change Falls Hard
• The NY Opening Forex Call is available for viewing
• Details of Challenger Job data
• US Challenger Job Cuts Improve

Lower ISM sends USDJPY and USDCHF lower yet Posted: 01 Jun 2011 07:07 AM PDT The USDJPY fell below the 80.69 level. The USDCHF fell to the support at the 0.8385 as outline in the PRIOR POST and have found some profit taking support.  These pairs are still fragile.  A break below opens up more stops. I see it as a key level. There seems to be a lot of longs at higher levels still.

ISM Data Comes in a Bit Weaker, Construction Spending Up with a Poor Revision Posted: 01 Jun 2011 07:04 AM PDT Construction Spending MoM:  Survey:  0.3%    Actual:  0.4%    Prior:  1.4%  Revised:  0.1% ISM Manufacturing:   Survey: 57.1    Actual: 53.5    Prior:  60.4 ISM Prices Paid:   Survey: 81.8  Actual: 76.5   Prior:  85.5

EURUSD not in play today…yet Posted: 01 Jun 2011 06:59 AM PDT The EURUSD is caught between EURO weak, USD weak.  So the action is choppy and not inspiring.  The high to low trading range is narrow at 63 pips.  This would typically suggest an extension of the trading range.  The 100 and 200 bar MA on the 5 minute chart are more or less converged at the 1.4416. Bullish above. Bearish below. Watch trendlines for targets (see chart). The high low are targets. The 38.2% of the weeks range at 1.4374 is a target below.

USDCHF extends downside fall in sharp move lower Posted: 01 Jun 2011 06:31 AM PDT The USDCHF has moved lower and has moved back into the channel. The target becomes the 0.8385 level now (see chart above).  The level where the market broke back into the channel is now the resistance at the 0.8444 level. The fall from the high today is large and steep.  The high was 0.8541. The low is 0.8410 so far. There has not been a meaningful correction (see chart below) which is indicative of a strong trend move (needless to say).   Trying to catch a falling knife is difficult.   A move toward the 0.8385 level will allow for risk to be defined by those looking to take profit without risking losing the trend position.  Look for some profit taking against this level by the shorts with stop selling/reshorting on a break below.

Trichet financial crisis can strike suddenly Posted: 01 Jun 2011 06:19 AM PDT Crisis response requires permanent alertness. Crisis response should be swift and decisive.

GBPUSD falls to new lows. Posted: 01 Jun 2011 06:01 AM PDT The ADP was weak but the trend in the GBPUSD off the back of weaker data today out of the UK continues to dominate. The price of the GBPUSD rose on the ADP, but the 100 bare MA on 5 minute chart capped the upside and the price has rotated back lower.  The pair has made a new lows and looks to test channel trendline on the daily chart (see below). That level currently comes in at the 1.6383 level. A move below that level will look toward the 1.63588 level which is the 38.2% of the move up from the May 24th low to the high reached just yesterday.

ECB Mersch says debt restructuring very unlikely Posted: 01 Jun 2011 05:43 AM PDT Adds that European banks have become more resilient Debt restructuring could be major blow for some banks Expects Greece economic growth in 2H of 2011

ISM Data Due at 10AM Posted: 01 Jun 2011 05:30 AM PDT

USDJPY falls hard on weak ADP Posted: 01 Jun 2011 05:29 AM PDT The 38K private sector job growth as reported by the ADP  is much weaker than expected and leads to a sharp fall in the USDJPY (dollar in general).  The price moved below the 100 hour MA at the 81.15 level adn has extended down toward the weeks lows at the 80.69 level.  A move below this level opens the door for a move to test the 80.00 level. The low for May came in at 79.56.  On the topside, look for resistance/sellers against the 81.06 level. This is the 38.2% of the last trend move down in today’s trade. Traders who may be caught long would likely be happy to exit at this level.  Traders looking to get on the trend could also use the level to set shorts.  Nevertheless, a move above this level is the risk if the trend to the downside is to continue.

EU’s Rehn Speaks in NY Posted: 01 Jun 2011 05:28 AM PDT Says: Greece unlikely to be able to access markets in early ’12 Confident Greek review to be concluded in coming days June is critical month in overcoming debt crisis EU needs to ensure Greece is financed in medium term Vienna-Style plan in works for Greece Greece has not failed all its targets Greek plan to be completed by June 20 Greek glass is more half-full than half-empty Greece to have primary structural surplus Greece needs political will to achieve results Greek default would have serious risks Greek default would have very negative impact Greek debt restructuring is not on the cards ‘Its very difficult’ in Ireland right now Restructuring is not part of our plan Fully respects independence of ECB Spain has decoupled from 3 countries in aid programs Spain has been able to convince markets, public Spain has taken bold decisions

Rehn says EU must ensure Greece is finance in medium term Posted: 01 Jun 2011 05:25 AM PDT Greece has not failed all its targets Plan to be completed by June 20 Glass is more than half full Greece to have primary structural surpluses Need political will to achieve results.

ADP Employment Change Falls Hard Posted: 01 Jun 2011 05:16 AM PDT Employment Change:  Survey: 175K    Actual: 38K    Prior: 179K    Revised: 177K May vs. April Small Firms(1-49): 49,128  vs  49,101 Level Change: 38  vs  177 Medium Firms(50-499):  41,932 vs 41,902  Level Change:  30 vs  83 Large Firms (499): 17,446  vs  17,465 Level Change:  -19 vs  10

The NY Opening Forex Call is available for viewing Posted: 01 Jun 2011 05:11 AM PDT

Details of Challenger Job data Posted: 01 Jun 2011 04:33 AM PDT The Challenger Job cuts are compared to a year ago. So this month the announced job cuts are down 4.3% when compared to the same month a year ago. But what about last month.  Details of the Job cuts over the last two months show the following: TOTAL  cuts: 37,135 vs   36,490 YOY% change     -4.3%  vs  -4.8% —————————— East   5,971 vs  11,965 Midwest   7,421 vs    6,196 West 10,437  vs 10,621 South  13,306  vs  7,708 Later at 8:15 AM ET, the ADP estimate of Private Payroll will be released. The estimate is for a gain of 175K vs 179 K last month. The actual Labor Department Private Payroll added a greater than expected 268K – 93K more than what the ADP estimated.   This may suggest a revision up of the prior month.  The Initial Claims data this month have been much higher than expectations and could suggest we see the same in the Labor Report on Friday. Extremely harsh weather in the US likely contributed to some weakness.  Higher oil prices may also be responsible as the cost of doing business forces businesses to cut back and may also lower their projections on future growth prospects.

US Challenger Job Cuts Improve Posted: 01 Jun 2011 04:33 AM PDT US Challenger Job Cuts:     Actual: -4.3%   Prior: -4.8%                                        May vs. April Total:                          37,135 vs  36,490  Level Change:         645 vs -5,038 YOY% Change:       -4.3% vs -4.8% East:                           5,971 vs 11,965 Midwest:                  7,421 vs 6,196 West:                         10,437 vs 10,621  South:                      13,306 vs 7,708

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