Forex Market Updates & Commentary

EURUSD tests intraday support level at 1.3617. The 1.3598 is the next target.
Moody’s: Deficit is negative for credit. Cites regional difficulties.
ECB buys 13.9 billion. 143 billion to date on the bond buying program.
ECB announces bond purchases for the last week in a few minutes.
USDJPY moves back above old trendline support at 77.17
GBPUSD corrects back higher today. Support at 1.5843 currently.
EURUSD breaks higher in early NY trade. Probes upside levels
Dallas Fed President Fisher speaks on Bloomberg
Trichet says ECB will preserve its credibility in all circumstances
NY Morning Forex Commentary for Sept 12 2011
The Forex Week Ahead for the week of September 11th 2011
9-12 Calender
Aussie trade balance 1.83B vs. 1.91B forecast and 1.82B prior reading.
Japanese CGPI (y/y) 2.6%
Japanese BSI manufacturing index 10.3 vs. -23.3 prior reading.

EURUSD tests intraday support level at 1.3617. The 1.3598 is the next target.

Posted: 12 Sep 2011 07:57 AM PDT

The EURUSD is testing the 100 bar MA on the 5 minute chart at the 1.3617 level. The price has held on the first test. A move below at the 200 bar MA at the 1.3598 level.

Moody’s: Deficit is negative for credit. Cites regional difficulties.

Posted: 12 Sep 2011 07:45 AM PDT

Moody’s says Spanish deficit is negative for credit. They add that the regional deficits are showing the inability to cut spending.

ECB buys 13.9 billion. 143 billion to date on the bond buying program.

Posted: 12 Sep 2011 06:31 AM PDT

This is above the 10 billion expected. This suggests that the ECB is more entrenched in the bond purchase program in an attempt to keep rates contained.

The ECB buys bonds to artificially keep rates low for countries like Italy and Spain. The more they buy, the more support they are providing to their bonds. It should not be positive for the EURUSD since theyare forced to buy more to keep the rates steady. In other words, it means that there is not enough demand in the market to keep rates steady. So they have to support with their own buying.

The difference between what the ECB is doing and Quantitative Easing in the US, is that in the US, the Fed bought bonds and other securities to do the same thing. However, when they bought the bonds, they kept the money in the “system”. This increases the money supply and provides excess liquidity to presumingly stimulate lending and growth.

In the EU, the ECB buys bonds but they also have been conducting draining operations to offset the money going to the sellers of the bonds. So in effect they take from the rich and give to the poor (Italy and Spain in the form of lower yields on debt otherwise).

In short the Fed is adding liquidity while keeping rates artifically low. While the ECB is looking to keep some rates artificially low, while keeping the overall liquidity steady (not expansionary).

ECB announces bond purchases for the last week in a few minutes.

Posted: 12 Sep 2011 06:29 AM PDT

The expectations according to sources is 10 B in the current week.

USDJPY moves back above old trendline support at 77.17

Posted: 12 Sep 2011 06:22 AM PDT

GBPUSD corrects back higher today. Support at 1.5843 currently.

Posted: 12 Sep 2011 06:01 AM PDT

The GBPUSD made new lows for the move down today but found good support buying at the 1.5800 area. Looking at the hourly chart above, the GBPUSD held channel trendline support and has bounced higher. The price is now above the upper trendline from the channel developed over the last two days of trading. The next target on the hourly chart comes in at the 1.5916 which is teh low from Thursdays trade. The topside trendline comes in at the 1.5939 level. The 100 hour MA comes in at the 1.5946 level.

Looking at the 5 minute chart, the price is back above both the 100 and 200 bar MA (blue and green lines in the chart above). The Moving averages are moving flattening/moving higher which suggests that there may be buyers on dips against the levels. The 200 bar MA is currently at the 1.5843 level (green line in the 5 minute chart above). The 100 bar MA (blue line ) is at the 1.5935 level. Look for buyers on dips toward these levels with stops below.

On the topside the next target is the 1.5902 level which corresponds with the 38.2% of the move down from the last spike high on Thursday. That and the 1.5916 level should attract profit taking sellers on the first look.

EURUSD breaks higher in early NY trade. Probes upside levels

Posted: 12 Sep 2011 05:38 AM PDT

The EURUSD has broken back into an old channel for the pair at the 1.3649 level . The pair has been losing downside momentum over the last few hours of trading (see how the the price has moved back above downside channels trendlines in chart above) and shorts have been forced to cover. Upside resistance on the hourly chart now comes in against the 1.3705 level and above that the 1.3721 level which is the 38.2% of the move down from last Thursdays high (see chart above).

Looking at the 5 minute chart, there is closer resistance at the 1.3690 area currently which is bear flag resistance (see topside trendline in the chart below). Look for sellers on a test of this level in early trading.

On the downside, the 1.3649 level on the hourly chart above and the 1.3643 level (the lower channel trendline in the bear flag below) are the levels to eye for downside clues. Breaks below increase the bearish bias for the pair.