Forex Market Updates & Commentary

Mirror Trader training class Wednesday July 27 1:00PM Eastern Time Zone
EURUSD heads back toward the 1.4360-69 resistance area
As expected, the Senate does not pass Cut, Cap and Balance proposal
Fitch says not unrealistic expectations for Greece to be in selective default for only a few days
Boehner says not close to an agreement
EU Barnier comments that Greek debt plan only sustainable if economy grows
EURUSD moves toward target support at the 1.4316-22 area.
USDCAD moves above the 100 hour MA and 38.2% retracment
Gold bounces higher as safe haven bid returns
EURUSD continues the move lower as EU doubts enter
Austrian Finance Minister says EFSF not to become a bad bank
USDCAD falls to days midpoint on better Retail Sales
Canada Retail Sales Data Improves
The NY Morning Forex Commentary for July 22nd is available for viewing
Canada Retail Sales Data Due at 8:30

Mirror Trader training class Wednesday July 27 1:00PM Eastern Time Zone

Posted: 22 Jul 2011 07:40 AM PDT

We'd like to invite you to spend an hour with Ophir Schultz, Tradency Regional Manager and FXDD's Forex Trainer Shawn Powell for a free, interactive webinar highlighting the features and functionalities of FXDD Mirror Trader. This is your opportunity to learn how to employ the FXDD Mirror Trader tools and strategies from a Tradency expert, as well as ask questions. With FXDD Mirror Trader, you can evaluate over 1,500 trading strategies developed by Forex traders and create personalized portfolio of those you wish to follow. Once you have created your portfolio, FXDD Mirror Trader will automatically execute the trades for your selected strategies.

Key Discussion Topics:

• Detailed review of FXDD Mirror Trader features and tools
• Tips on evaluating and choosing a trading strategy based on your goals and risk appetite
• Developing a goal of building a balanced and diversified portfolio
• Class finishes with a live participant Question & Answer session

Space is limited, so click here to register https://www1.gotomeeting.com/register/799333153
We look forward to seeing you on Wednesday July 27, 2011 at 1pm EDT.

EURUSD heads back toward the 1.4360-69 resistance area

Posted: 22 Jul 2011 07:39 AM PDT

Support held against the trendline and 38.2 retracement level and the market has reversed and moved back higher. The price is now up testing the resistance area outlined in the earlier posts today at the 1.4360-69 area. The area remains a resistance level and also has the 38.2% of the move down from the high to the low today at the 1.4367 level. Profit takers from the dip buyers may be happy to exit at the level, but should the price move above the 1.4369 level, the trend higher should continue.

The EURUSD is behaving nicely from a technical perspective today.

As expected, the Senate does not pass Cut, Cap and Balance proposal

Posted: 22 Jul 2011 07:38 AM PDT

Back to the drawing board.

Fitch says not unrealistic expectations for Greece to be in selective default for only a few days

Posted: 22 Jul 2011 07:24 AM PDT

The new rating will likely be B or CCC. Greece is currently CCC by Fitch. They are Caa1 by Moody’s and CCC by S&P. Below is the risk characterists of each

Boehner says not close to an agreement

Posted: 22 Jul 2011 07:20 AM PDT

The republicans have sent the Cut, Cap and Balance measure for Senate approval and it is up to them. Of course, that vote will be rejected this morning. He says they should send it back to the House with their changes.

So the finger pointing continues. He said it will be a hot weekend in Washington. This is in reference to the 100 degree temperature and the increase pressure/temperature to come to a solution.

And the soap opera continues.

EU Barnier comments that Greek debt plan only sustainable if economy grows

Posted: 22 Jul 2011 07:17 AM PDT

This is the fly in the anointment. Is good money being thrown at a bad situation. Will Greece be able to privatize their economy and build an economy that is sustainable in the face of austerity measures that should slow growth. The good news is the burden of higher interest costs are not a problem anymore. The bad news is that rates were low in the past and look where it got them. So is there a hope for growth and a sustainable economy? That is open for debate.

EURUSD moves toward target support at the 1.4316-22 area.

Posted: 22 Jul 2011 06:56 AM PDT

The EURUSD correction off the original lows, held the target resistance at the 1.4360-69 area (see chart below) and the price has continued its NY trend lower (see prior post). The price is now down testing the support at the 38.2% of the move up from yesterday’s low to the high today at the 1.43226 level. Trendline support (see chart above) also comes in at the area (1.4316).

There should be some profit taking buying at the defined risk area (1.4316-23), with a move below this support leading to some additional stop selling. On a break the next target would look toward the 1.4287 level (50% of the move up from yesterdays low – see hourly chart above).

The 38.2% of the weeks move higher in the EURUSD comes in at the 1.42748 level. This would also be a target level, should the selling continue in the pair today.

USDCAD moves above the 100 hour MA and 38.2% retracment

Posted: 22 Jul 2011 06:49 AM PDT

The USDCAD is moving above the key resistance at the 0.9503 level. Momentum should materialize above this level as both the 38.2% and 100 hour MA come in at the level. The next target is the 0.9528 for the pair.

Gold bounces higher as safe haven bid returns

Posted: 22 Jul 2011 06:37 AM PDT

Gold is back above the 1600 level after finding support at the 38.2% of the move up from the July 12th low earlier today (at 1583.28 – see chart above). The move higher has seen the price move back above the $1600 level and above the high from yesterday (but just barely so far). The high for the week remains an upside target at the $1609.79 area.

On the downside, the 100 hour MA (blue line in the chart above) is support. That level comes in at the $1596.13 level currently. Closer support also comes in at the upside trendline in the 5 minute chart below at the 1598 area.

The week overall has been a consolidation week for the precious metal with two way up and down action. The consolidation allowed the 100 and 200 hour MA to catch up to the price (see chart above). The price did fall throuugh the 200 hour MA (greenline in the chart above) for an hour or so today, but the 38.2% retracement was not far away and the price found the buyers – forcing that price back above the 200 MA line. This was a nice bottom for the pair and the market agreed.

The EU news is pretty much all out. The US news is yet to be complete but the expectation would likely be a disappointment. So with the consolidation over, it would seem the upside is the favored directional bias. Nevertheless, paying attention to the technicals are always encouraged as owners of Gold do tend to be central banks and they are spending a lot of money lately. So define risk. Keep risk to your minimum and trade your plan.

EURUSD continues the move lower as EU doubts enter

Posted: 22 Jul 2011 06:07 AM PDT

The EURUSD is trading at the session low, falling through the 1.4360 level which held support for much of the US afternoon session yesterday. The pair is targeting the 38.2% retracement of the move up from yesterday’s low to the high today. That level comes in at the 1.43226. The trendline which led the market higher for the 1st part of the week comes in at the 1.4516 level.

On the topside, the close resistance comes in now at 1.4360-69. Staying below these levels, should worry the buyers for the week, who may be inclined to take profit before the weekend.

The price has moved lower on the back of doubts coming out of the EU. There are reports that the bond price gains seen over the last few days will not last. Will it work. Will there be enough growth needed to heal the economies of the fragile. It may also be that the news is all out, so the trade is over.

Of course, a currency pair takes two to tango and the other half is the USD. WIth Washington lawmakers continuing to fumble the ball, this keeps the door open for dollar selling. As a result, I will continue to watch the technicals for clues and for stops on the trade bias (as per above) and also would expect that should the targets be met, that there should be traders covering.

Austrian Finance Minister says EFSF not to become a bad bank

Posted: 22 Jul 2011 05:55 AM PDT

The Austrian Finance Minister is on the wires saying the EFSF will not become a bad bank who parks the bad debt.

However, it is one thing to say it. Reality is another thing.

The purpose of the EFSF is to buy bonds that are being sold in the secondary market. For example, if there is liquidation in Italian Bonds, the EFSF could come in to support the market. It would be the equivalent of currency intervention (which typically does not work).

The problem with this idea is that often the bond selling is a result of creditors not being able to hold the paper of debt issuers who’s credit rating is being cut. That is, covenants within an insurance company may say they cannot hold bonds that are junk status. So, buying of the bonds by the fund could in effect do little to stop the decline. In essence, the EFSF would be the holder or bank who does in fact park the bad debt.

USDCAD falls to days midpoint on better Retail Sales

Posted: 22 Jul 2011 05:39 AM PDT

Canada Retail sales were better than expected and the price quickly moved to the midpoint of the days range. So from an economic standpoint we had much lower inflation and now higher growth. The BOC this week implied this week that they would look to take out the stimulus (i.e. tighten) as a result of expectations of a stronger 2H growth. WIth inflation down and retail sales picking up, i would think that this would keep the CAD supported (selling of the USDCAD on rallies).

The hourly chart below shows the key level on the topside which held the move higher today off the CPI data. The 0.9503 level has both the 38.2% retracement of the move down from the July 18th high to the low and the 100 hour MA at the same area. Staying below this level should keep the bulls under wraps. If the price moves above this key technical level, I would be more cautious as it suggest the market may be too short already and Friday square ups may lead to further upside momentum.