Forex Market Updates & Commentary

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• USDCHF new lows but just barely. Limited upside. Patience.
• Pending Home Rise 2.4% in June
• US Pending Home Sales Data Due at 10AM
• Russian Central Bank Official says no plans to change mix of US debt
• GBPUSD stays below flat 100 hour MA, but action is contained
• EURUSD bounces off support. Time to decide.
• Jobless Claims Drop Under 400K For First Time in 16 Weeks
• NY Morning Forex Commentary for July 28th 2011
• US Jobless Claims Due at 8:30AM
• UK CBI realized sales -5; worse than expected.
• Eurozone business climate indicator (July) 0.45 vs. 0.83 expected.
• Fitchs says will resolve Portugal’s rating watch negative in Q4 2011.
• ECB’s Mersch
• Italian hourly wages are up 0.1% from 0.0% last month.
• According to Greek fin. minister, IMF will support Greece as long as the country fulfills its obligations.

USDCHF new lows but just barely. Limited upside. Patience. Posted: 28 Jul 2011 07:05 AM PDT The USDCHF continues to make a new low each day of the week, but the lows are not followed by increased momentum.  The moves back higher are equally as uninspiring which is indicative of a balanced market.  The stagnation has allowed the 100 hour MA to start to catch up with the market (blue line in the chart above). This level will be eyed closely.  A test of the level should solicit sellers, with stops on a break above.  The current 100 bar MA is at 0.8048 and coming down. This is near the highs from yesterday.  Before that level is the channel trendline at the 0.8033 level.

Pending Home Rise 2.4% in June Posted: 28 Jul 2011 07:00 AM PDT Pending Home Sales (MoM):    Survey:  -2.0%    Actual: 2.4%    Prior: 8.2%    Pending Home Sales (YoY):     Survey:  14.7%   Actual: 17.3%      Prior:  15.5%

US Pending Home Sales Data Due at 10AM Posted: 28 Jul 2011 06:41 AM PDT

Russian Central Bank Official says no plans to change mix of US debt Posted: 28 Jul 2011 06:31 AM PDT

GBPUSD stays below flat 100 hour MA, but action is contained Posted: 28 Jul 2011 06:05 AM PDT The GBPUSD has stayed below the 100 hour MA at 1.6338 for all but two bars on the hourly chart today. The one move above took the price up to the underside of the trendline, but found sellers against the level.  Staying below the 1.6338 level today will keep the downside the favored direction as the market consolidates/corrects.  Admittedly, however, the momentum on the break of the trendline MA line has not exactly led to a sharp move lower.  Like on the upside, there was a break lower, but that too was reversed.  Nevertheless, the flattening 100 bar MA and the price staying below the 100 hour MA gives the nod to selling against the resistance with a stop on a move above the 100 hour MA level today.  Next downside target 1.4269 which is the low for the weeks trade. The 200 hour MA comes in at the 1.6244 level (green line in the chart above). The 100 day MA is also near that level (blue line in the chart below). That level comes in at 1.6247 today.

EURUSD bounces off support. Time to decide. Posted: 28 Jul 2011 05:41 AM PDT The EURUSD has moved down and tested the old trendline support line from the May/june period  at 1.4244 and the 38.2% retracement at the 1.42679 level.   The current price is back above both as profit takers were happy to cover against the levels.  Concerns about Spain/Italy and thought that  despite the hurdles ahead Washington will find a solution have kept the pair pressured for most of the day.  The Initial Claims came out better today and instead of sending the dollar higher still, the market seems to be more happy to rotate into risk.  That seems to help the EURUSD of late and now it is up to the buyers to push the market higher. If they can keep the price above the 1.42679 level, the upside has a potential. If the bottom is in place, the price should now look to stay above the 1.4268 area (38.2% of the last move up – see daily cahart above).  On the topside, additional momentum would be found on a break above the 1.4300 to 1.4309 level. This line represents the 38.2% of the move down (see 5 minute chart above). If the price cannot extend above this level, the bears – despite the move higher - remain in control and a rotation back down would be expected. If the price falls back below the 1.4268 level, the buyers will likely sell.

Jobless Claims Drop Under 400K For First Time in 16 Weeks Posted: 28 Jul 2011 05:31 AM PDT Jobless Claims:  Survey: 415K  Actual: 398K  Prior: 418K  Revised: 422K Continuing Claims:  Survey: 3700K  Actual: 3703K  Prior: 3698K  Revised: 3720K

NY Morning Forex Commentary for July 28th 2011 Posted: 28 Jul 2011 04:52 AM PDT

US Jobless Claims Due at 8:30AM Posted: 28 Jul 2011 04:04 AM PDT

UK CBI realized sales -5; worse than expected. Posted: 28 Jul 2011 03:02 AM PDT

Eurozone business climate indicator (July) 0.45 vs. 0.83 expected. Posted: 28 Jul 2011 02:01 AM PDT

Fitchs says will resolve Portugal’s rating watch negative in Q4 2011. Posted: 28 Jul 2011 01:26 AM PDT

ECB’s Mersch Posted: 28 Jul 2011 01:08 AM PDT New sources of inflationary pressure could emerge. Myths of premature collapse of EUR not based on facts and figures. Accelerated inflation in emerging markets risks causing imported inflation in developed world. Data points to an ongoing recovery in the Euro zone, albeit at a slower pace.

Italian hourly wages are up 0.1% from 0.0% last month. Posted: 28 Jul 2011 01:05 AM PDT

According to Greek fin. minister, IMF will support Greece as long as the country fulfills its obligations. Posted: 28 Jul 2011 01:01 AM PDT EUR trading on session highs following the release.

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