Forex Market Updates & Commentary

EURUSD falls sharply on no QE. Stocks down
Bernanke. No new steps for promoting growth.
Michigan comes in at 55.7 vs 55.8
From the low support to the high resistance
Forex Fast Track Live Trading Workshop- Phoenix/Scottsdale AZ October 1 2011
USDJPY rallys slowly and fall quickly
Former Fed Governor Kroszner says all burdens cannot be on monetary policy
Greece activates special liquidity fund for banks
Goldman chief economist says see a one in three chance of recession
US GDP Slightly Lower, Personal Consumption Up
EURUSD tracking along the technical path before Bernanke
Feds Plosser (voted against language in FOMC Statement) says FOMC overly pessimistic
US GDP Data Due at 8:30AM
The NY Morning Forex Commentary for August 26th is available for viewing
EURUSD tests trendline and 100 hour MA in early NY trade

EURUSD falls sharply on no QE. Stocks down

Posted: 26 Aug 2011 07:13 AM PDT

In volatile trade the EURUSD fell sharply on the back of no new QE and a stock market that is down 178 points now.

The price has moved below the support against the 200 hour MA a(green line) t the 1.4396 area. This level is also trendline support from the August 11th low. The market will be watching this level on any correction higher. If the price can remain below, the bears remain in charge.

Staying below the 1.4396 will target the 38.2% oat the 1.4358. The low from Monday at 1.4346 and the low from yesterday at 1.4327 are all other close targets. The range for the week remains narrow so an extension of the range cannot be ruled out.

Markets are still volatile and will likely remain so as the stock market flucuates. Will the traders who move the market show up today. They have not been there this week, with extensions rejected.

Bernanke. No new steps for promoting growth.

Posted: 26 Aug 2011 07:01 AM PDT

http://www.federalreserve.gov/newsevents/speech/bernanke20110826a.htm

Range of tools for stimulating growth
Optimistic view on prospects
Pace of recovery disappointing
Recession deeper than expected
Expects action for housing by government
September meeting to 2 days from one day
Inflation to be at or below 2%
2H likely to improve
Recovery has been slow and erratic
FInancial stress will be a drag
Recovery will likely strengthen over time
Fed needs to be alert to financial risks to recovery
Fed has limited ability to ensure long run growth
Needs better process for fiscal decisions.

Michigan comes in at 55.7 vs 55.8

Posted: 26 Aug 2011 06:55 AM PDT

Consumer confidence 55.7 final vs preliminary 54.9. Last month 63.7
Economic conditions 68.7 final vs preliminary 69.3 Last month 75.8 (lowest since Aug 2009)
Economic outlook 47.4 final vs preliminary 45.7 Last month 56.0

From the low support to the high resistance

Posted: 26 Aug 2011 06:54 AM PDT

As the 10 AM Bernanke speech approaches the EURUSD moved up to test the 1.4450 trendline resistance. This is the opposite of the NY low extreme which tested the support against the 200 hour MA and trendline from August 11th.

The Chairmans speech will not be live. The Fed is likely to release the text on their website at http://www.federalreserve.gov/newsevents/default.htm . The headlines will stream over the wires. The expectation is there is no additional QE. The chairman is expected to say he has tools available should the need arise.

Forex Fast Track Live Trading Workshop- Phoenix/Scottsdale AZ October 1 2011

Posted: 26 Aug 2011 06:42 AM PDT

USDJPY rallys slowly and fall quickly

Posted: 26 Aug 2011 06:39 AM PDT

The USDJPY spent a few days moving from level to level – slowly but surely. The price reached and surpassed the 38.2% of the move down from the intervention high reached on August 4th at 77.54. A higher reached 77.65 and when the price moved back below the 38.2% level, the selling was on. From there ther price moved from level to level (see chart above) in a trending move.

The 5 minute chart below shows the acceleration of the decline. The support target comes in at the 76.50 area now. A break below targets 76.25 and 76.00.

Former Fed Governor Kroszner says all burdens cannot be on monetary policy

Posted: 26 Aug 2011 06:12 AM PDT

Feels Bernanke will say has all the tools in case something goes wrong
It will be up to fiscal and others to get jobs stimulated
No direct focus on the stock market by the Fed.
Fed is not the cure all.
He will likely defend the QE2

Greece activates special liquidity fund for banks

Posted: 26 Aug 2011 05:48 AM PDT

The expectation is that banks expected to tap liquidity fund. This liquidity is to counter the flow of funds out of Greek banks. THe WSJ reported today. The withdrawl of funds exasperates the problems with Greece as banks have less money to lend out.

This is a reminder of the bearishness inherent in the Euro region from the problems in countries like Greece.

Goldman chief economist says see a one in three chance of recession

Posted: 26 Aug 2011 05:42 AM PDT

They expect an extension of the payroll tax cut. Expects Q3 and Q4 to be quite soft.

His comments are a reminder that the dollar has a reason to be weak. This seems to balance the EURO issues. CNBC is harping on how the German Dax is down 20% this month. This is certainly bearish for the EURUSD. So the bulls and bears fight it out.

US GDP Slightly Lower, Personal Consumption Up

Posted: 26 Aug 2011 05:32 AM PDT

GDP (Annualized): Survey: 1.1% Actual: 1.0% Prior: 1.3%

Personal Consumption: Survey: 0.2% Actual: 0.4% Prior: 0.1%

GDP Price Index: Survey: 2.3% Actual: 2.4% Prior: 2.3%

Core PCE QoQ: Survey: 2.1% Actual: 2.2% Prior: 2.1%

The data is a touch weaker than expected. The focus now switches to the 10 AM speech from Ben Bernanke.

EURUSD tracking along the technical path before Bernanke

Posted: 26 Aug 2011 05:30 AM PDT

The EURUSD has moved off of the high in early NY trade and has tested the technical path that the traders have blazed in the recent trading on both the upside and the downside so far today.

The low reached in the NY session has so far bounced off the 200 hour MA (green line) and the upward sloping trendline which extended up from the August 11th low. Earlier, the price tested, then fell below, the 100 hour MA (blue line) and another trendline developed over the last 4 days of trading. That level came in at the 1.4111 area. WIth the price below this level currently, this level is now topside resistance. The price between support at 1.4386 and resistance at 1.4411 is the comfort zone for traders for the time being.

Yesterday the price fell below these support levels and fell sharply – extending the narrow trade range in the process. The range for the week continues to be contained with a low fo 1.4327 and a high of 1.4499. The range does have a chance to be extended today (either to the upside or the downside) and with Bernanke on tap at 10 AM, the chance for a volatile move can be expected.

On the downside, in addition to the levels mentioned above at 1.4396, the 38.2% of the move up from August 11th low at 1.4358 is another target. Below that the original low for the week at the 1.4346, the current low at 1.4327 and the 50% retracement at 1.4309 are targets.The 100 day MA (not shown) comes in today at the 1.4364.

On the topside, a move above the 1.4411 level will need to be breached.Above that, the trendline tested earlier today at the 1.4450 area will be key. This trendline has been tested on 4 separate occasions over the last 4 trading days. Above that 1.4470, 1.4500 and then the August high at 1.4516.

Feds Plosser (voted against language in FOMC Statement) says FOMC overly pessimistic

Posted: 26 Aug 2011 05:14 AM PDT