Forex Market Updates & Commentary

GBPUSD breaks below the 200 day MA at the 1.6119 level and moves lower
EURUSD moves below support at 1.4108.
USDCHF bulls and bears fight it out in US holiday trading
Eurozone retail sales (July) 0.2% vs. 0.0% expected.
UK services PMI (Aug) 51.1 vs. 54.0 expected.
Trichet on the wires….
Eurozone services PMI (m/m) 51.5 as expected.
Spanish services PMI 45.2 vs. 46.5 expected, lowest since 2009.
World Bank Chief says if EU governments can’t deal with debt problems, it will put stress on banks.
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GBPUSD breaks below the 200 day MA at the 1.6119 level and moves lower

Posted: 05 Sep 2011 07:10 AM PDT

The GBPUSD has fallen below the 200 day MA at the 1.6119 level for the 3rd time today (green line in the chart above). On this move, the price moved fast to new lows. The market will be looking for corrections to be more contained then the previous two moves lower (see 5 minute chart below). Staying below the 1.6090-94 level will keep the bears firmly in control.

EURUSD moves below support at 1.4108.

Posted: 05 Sep 2011 06:41 AM PDT

The EURUSD has been tracking below a channel reistance on the hourly chart above. The line has kept the upside contained for the last 6 hours of trading. Staying below the line – currently at 1.4129 – keeps the bears in charge in todays trading.

ON the daily chart, the price is moving below support at the 1.4108 level. This is the 61.8% of the move up from the July to August range (see chart below). The move below this level next targets the 1.4008 level on the daily chart which is the 200 day MA (green line in the chart below).

Before that level, look for trendline support at the 1.4088 level and below that the 1.4043 level (see chart below). These level correspond with channel trendlines on the hourly chart.

USDCHF bulls and bears fight it out in US holiday trading

Posted: 05 Sep 2011 06:16 AM PDT

The USDCHF rebounded sharply on Friday, despite the weak US employment report. The move to the upside found resistance against the 38.2 of the move down from last weeks high at the 0.79077 level (the high reached 0.7910 today) and a move back down has ensued today. The low today tested another retracement level against the 38.2% of the move up from Fridays low (see chart below). So although there are reasons to expect lower prices from the hourly chart, the 5 minute intraday chart is showing reluctance.

On the 5 minute chart below, the intraday traders may also look to lean against the 100 bar MA (blue line in the chart below). Over the last few hours the price has been able to stay below this MA line and traders intent on moving the price back lower will look for the price to stay below this line. If the bears can keep the price below this moving average (at 0.7868 currently), a test of the days lows can be expected. If the price moves back above the level, the holiday trade is likely to keep the pair range bound.

Eurozone retail sales (July) 0.2% vs. 0.0% expected.

Posted: 05 Sep 2011 02:19 AM PDT

UK services PMI (Aug) 51.1 vs. 54.0 expected.

Posted: 05 Sep 2011 01:29 AM PDT

GBP slightly weaker on the release.

Trichet on the wires….

Posted: 05 Sep 2011 01:21 AM PDT

Global crisis is hitting Europe particularly hard.
Imperative to have framework to oversee Euro zone budget.
Spirit of growth and stability pact has been weakened.
Crisis has revealed necessity for more Euro zone governance.
Consensus now exists on stiffening stability pact.
One day the European people will have a federal government.
In the longer term the Euro zone should have much tougher governance.
Financial sector should be decoupled from sovereign debt risk in the Eurozone.
Urges rigorous and full implementation of the July 21 agreement.
Sees structural barriers to growth in the Eurozone.

Eurozone services PMI (m/m) 51.5 as expected.

Posted: 05 Sep 2011 01:18 AM PDT

Spanish services PMI 45.2 vs. 46.5 expected, lowest since 2009.

Posted: 05 Sep 2011 12:32 AM PDT

World Bank Chief says if EU governments can’t deal with debt problems, it will put stress on banks.

Posted: 04 Sep 2011 11:44 PM PDT

Hard to see if China relying on exports, investments to drive growth in the next 10 years.
China needs to re-balance its economy and boost consumption.
US financial institutions have active role to rebuild capital bases.

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Posted: 04 Sep 2011 09:30 PM PDT