Forex Market Updates & Commentary

EURCHF on it’s own mission higher
USDCHF moves above the 38.2% Fibo Resistance
IMF cuts 2011 world GDP to 4.2% from 4.3%
ECB Trichet says central bank will maintain solid anchoring of inflation expectations
USDCHF moves to new day highs. Keeps bullish bias intact
EURUSD tries the upside. Moves back above the 1.4516 old August high
Trichet, Juncker, Rehn is due to speak at 9 AM ET.
Pending Home Sales due later at 10:00 AM ET
Income as expected at 0.3%, Spending higher at 0.8% (vs 0.5%)
US Personal Spending and Income due at 8:30 AM ET
The NY Morning Forex Commentary for August 29th 2011
French foreign minister Juppe says preserving EUR is in Europe’s best interest.
GBP/USD finding resistance from 61.8% on hourly
S&P says its unlikely to change Japan grade outlok to stable for now.
Italian consumer confidence (Aug) 100.3 vs. 101.9 expected.

Posted: 29 Aug 2011 07:45 AM PDT

The EURCHF is also moving sharply higher today – breaking above the trendline resistance at the 1.1781 level. The pair has reached a high today of 1.1970 as it moves closer and closer to the key 100 day MA and 61.8% retracement of hte move down from the April 6th high at 1.2026 level. The pair started this move higher after breaking above the bull flag on Friday (see chart above).

USDCHF moves above the 38.2% Fibo Resistance

Posted: 29 Aug 2011 07:20 AM PDT

The USDCHF (and EURCHF) has continued its move to the upside with the pair now breaking above the 38.2% of the move down from the December 2010 high to the low reached this month at the 0.8210 level at the 0.8210 (see prior post by clicking here). Traders will be watching the level for support on a move back lower. Staying above, keeps the bulls in charge today as it would be a clear sign that the the trend higher continues for the pair. Another level to watch on the downside will be the 0.8190 level which is the 38.2%o of the last leg higher in the pair. Staying above this level will also keep the bulls in charge (see chart below)

The USDCHF is finding support as worries about intervention remain. Interest rates are also near 0% in Switzerland which is making holding CHF difficult for speculators. UBS announced on Friday, they would be charging a fee for certain deposits which in effect lowers the rate even more. The measures, coupled with a weaker currency that has some bullish technicals taking charge could keep the bulls in charge for the pair. The next key upside target for the pair is the 100 day MA at the 0.8368 level. This target is not out of the question for the pair.

IMF cuts 2011 world GDP to 4.2% from 4.3%

Posted: 29 Aug 2011 06:31 AM PDT

EU Forecast cut to 1.9% from 2.0% for 2011. 2012 cuts forecast to 1.4% from 1.7%

ECB Trichet says central bank will maintain solid anchoring of inflation expectations

Posted: 29 Aug 2011 06:16 AM PDT

He adds ECB not taking on too much risk.
Increase in ECB Balance sheet not as large as large Fed or BoE
Moderate growth expected in the EU
Uncertainty remains high
Inflation likely to stay above 2% in the coming months
Underlying pace of monetary remains moderate
Liquidity to remain for precautinary measures
Bond purchases are no substitute for budget discipline
ECB bond purchases to restore policy transmission
No liquidity shortage in EU banks

USDCHF moves to new day highs. Keeps bullish bias intact

Posted: 29 Aug 2011 05:59 AM PDT

The USDCHF has continued its move to the upside and is trading at new highs for the day. The price last traded at this level on July 22nd, 2011. The next target will come in at the 0.8210 level which is the 38.2% of the move down from the December 2010 high to the low reach this month. The price broke above trendlines today at 0.8095 and on Friday moved above the bull flag formation (see chart below). Momentum is developing.

Intraday traders will like to see the price hold above the 0.8155 level. This was the high from Friday and an area where the price held earlier today. Below that level is the 38..2% fibonacci retracement of the days range at the 0.8142. Staying above this level will keep the bulls in charge for the pair (see chart below).

EURUSD tries the upside. Moves back above the 1.4516 old August high

Posted: 29 Aug 2011 05:45 AM PDT

The EURUSD broke activity has picked up with a move back above the 200 bar MA (green line) on the 5 minute chart at the 1.4500 level. The price has pushed to a high of 1.4523 (so far). This is above the 100 bar MA on the 5 minute chart at the 1.4515 level (blue line). The 1.4516 level was also the high from August 17th. Staying above might gain the markets attention and push the price onward.

Staying above the 1.4516 will of course look toward the highs for the day at the 1.4548 level. Above that level the July high at 1.4576 will be the next target to surpass (see the hourly chart above).

Trichet, Juncker, Rehn is due to speak at 9 AM ET.

Posted: 29 Aug 2011 05:38 AM PDT

They are to speak at the EU Parliament on Debt Crisis

Pending Home Sales due later at 10:00 AM ET

Posted: 29 Aug 2011 05:36 AM PDT

Income as expected at 0.3%, Spending higher at 0.8% (vs 0.5%)

Posted: 29 Aug 2011 05:31 AM PDT

The Savings Rate fell back to 5.0% from 5.5% last.

Meanwhile PCE Core rose by 0.2% MoM and the Core YoY rose to 1.6% vs 1.5% expected.

There is very little activity. London is off today which is keeping activity lighter today.

US Personal Spending and Income due at 8:30 AM ET

Posted: 29 Aug 2011 05:24 AM PDT

The Savings Rate rose to 5.4% last month. Consumers are retrenching and spending less.

US PCE Core is expected to rise by 0.2% MoM and 1.5% YoY.

The NY Morning Forex Commentary for August 29th 2011

Posted: 29 Aug 2011 04:56 AM PDT

French foreign minister Juppe says preserving EUR is in Europe’s best interest.

Posted: 29 Aug 2011 02:43 AM PDT

GBP/USD finding resistance from 61.8% on hourly

Posted: 29 Aug 2011 02:19 AM PDT

For the most part tonight the pair has traded between the 100 hour moving average and 61.8% retracement line on the move from last Wednesday’s high Friday’s low; mostly due to the lack of economic data. Currently, the first significant level lower is the 50.0% line at 1.63691; higher is 1.64402 where we find the 200 hour moving average and and old support level from earlier in the month.