Tuesday, October 18, 2011

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

Italy banks and business leaders say Berlusconi govt must end delays to boost growth

Posted: 18 Oct 2011 07:21 AM PDT

EURUSD banging on the 200 hour MA again

Posted: 18 Oct 2011 07:12 AM PDT

The EURUSD moved lower and tested the 200 hour MA at the 1.3654 level (low reached 1.3654). The inability to break below the level has profit taking buyers coming in once again with the 1.3681 level the next key target.  A move above that level is needed to take some of the sting out of the selling today. 

On the topside the underside of the trendline (see chart above) provided the resistance for the pair.

Earlier today a source from the German ruling coalition said that a permanent Troika for Greece is conceivable if current mission has doubts about debts.  It was also said that leveraging EFSF via the ECB is ruled out.

US Housing Market Index 18 vs Projected 15 and Prior of 14

Posted: 18 Oct 2011 07:00 AM PDT

Central Bank of Turkey intervening via daily foreign exchange selling auction

Posted: 18 Oct 2011 06:41 AM PDT

The Central Bank of Turkey is in the market selling USDTRY lower via daily fx auction selling. The central bank announced that they would offer a record $1.35 billion at the daily foreign exchange selling auction. The price has fallen from a high in the NY session at 1.8710 to a low of 1.8474 today.

The Lira has been under pressure as traders exited the “risk on” trade on the back of global growth concerns and especially concerns from the neighboring Eurozone debt problems.

Earlier this month the central bank slashed reserve requirements for the currency in another attempt to slow the liras decline (USDTRY moving higher). If less reserves are required to hold, it should increase the demand for the currency. Those moves sent the USDTRY down from a high of 1.9083, to a low of 1.8144 on October 13th. The price over the last few days has risen back to 1.8747 today, prompting the action by the central bank today.

Turkey has enjoyed strong growth (10% in the 1st half of the year) but also has large budget deficits which worried investors.  The central bank could increase the currencies value by raising rates but has chosen to use intervention in an attempt to slow the currencies decline. 

From a technical perspective look for resistance at the  low from earlier today at the 1.8590 level (see chart below). On the downside, the next target for the pair will come in at the 1.8517 llevel, then the 1.8445 level and below that the 200 and 100 hour MAs come in at the 1.8403 and 1.8387 levels respectively.

Having PC problems..

Posted: 18 Oct 2011 06:27 AM PDT

To all,

I am having technical difficulties at the moment which are being worked on. I am sorry for the inconvenience.

Hopefully it will be rosolved soon.

Greg

TIC Flow Data Proves Higher

Posted: 18 Oct 2011 06:01 AM PDT

FXDD Morning Forex Commentary is available for viewing

Posted: 18 Oct 2011 05:38 AM PDT

US PPI Rises 0.8%

Posted: 18 Oct 2011 05:34 AM PDT

Producer Price Index (MoM):     Survey: 0.2%    Actual: 0.8%     Prior: 0.0%  

PPI Ex Food & Energy (MoM):    Survey: 0.1%    Actual:  0.2%       Prior: 0.1%   

Producer Price Index (YoY):     Survey:  6.4%    Actual: 6.9%      Prior: 6.5%    

PPI Ex Food & Energy (YoY):     Survey: 2.4%    Actual: 2.5%     Prior: 2.5%

Bobbys Corner-Open Market-October.18.2011

Posted: 18 Oct 2011 05:17 AM PDT

Good Morning:

The Euro lost some steam overnight, as Moody’s Investor Service indicated that France is in jeopardy of losing it’s top credit rating .  Moody’s stated that France is under threat as the regional debt crisis adds the potential for additional credit problems in France and the Euro Zone overall.
France’s 10 year notes were the 4 th worst performer in the 3rd quarter, behind Greece, Belgium, and Ireland.
 
Risk is moving to the sidelines, as world equity markets turned lower, after yesterday’s selloff on Wall Street.
Gold, silver, oil and the commodity world are all lower this morning-and US Futures are also pointing to a lower opening this morning.

This morning we have data on PPI and TICs report.  The markets will be watching for any pickup in inflation, but investors will be looking at
news about Europe and their debt problems-along with equity flows.

TIME       FOR EST. PRIOR
8:30a.m. PPI MoM     SEPT. 0.20% 0.00%
8:30a.m. PPI EX FOOD & ENERGY MoM SEPT. 0.10% 0.10%
8:30a.m. PPI YoY          SEPT. 6.40% 6.50%
8:30a.m. PPI EX FOOD & ENERGY YoY SEPT. 2.40% 2.50%
9:00a.m. TOTAL NET TIC FLOWS   AUG. -$20.0B $9.5B
10:00a.m. NAHB HOUSING MARKET INDEX OCT. 15.O      14.O

HAVE A GREAT DAY & GOO DLUCK

US PPI Data Due at 8:30AM

Posted: 18 Oct 2011 04:45 AM PDT

The EURUSD looking toward the 200 hour MA

Posted: 18 Oct 2011 04:44 AM PDT

The 1.3881 level was an important level last week. The level represented the 38.2% of the move down from the August 2011 high price (see chart above).  As such, the market’s sharp move higher last week found willing sellers against in on Monday and Tuesday, then buyers on the break through on Wednesday. On Thursday, the level was tested again on the corrective move lower increasing the levels importance. 

In the last 4 hourly bars, the price has been above and below the key level, but has shown difficulty in keeping momentum below the level. One cause is likely the 200 hour MA which is currently at the 1.3648. The low for the day is 1.3656. So early profit taking seller may be coming in against the level and bringing the selling and buying pressure more toward equilibrium (i.e., non trending).

A break below the 1.3648 is the next target for the sellers.  If this can be accomplished, the next target for the pair today will be the 1.36197 level which represents the 38.2% of the move up from the October low on October 4th.   A move below this level could shift the bearishness for the pair further to the downside as optimism about the Euro debt solutions starts to fade as the October 23rd date approaches.

USD/CAD testing 200 hour moving average

Posted: 18 Oct 2011 02:57 AM PDT

Following some less than bullish comments from EU’s Rehn and Nouriel Roubini, the USD has gained some strength in recent trading. Currently USD/CAD is testing resistance at the 200 hour moving average after breaking out of a downward channel to the topside. Continued USD buying could see the pair at 1.02713; a full retracement on the move from Oct 13th high to yesterday’s low.

According to EU Officials….

Posted: 18 Oct 2011 02:28 AM PDT

  • EFSF fund could have flexibility to alter the size of guarantees it offers on an auction by auction basis.
  • Main idea for leveraging Eurozone bailout fund is to guarantee first losses on new debt.
  • Degree of leverage would not be fixed, but likely to vary between 3 and 5 time.

ZEW Comments

Posted: 18 Oct 2011 02:25 AM PDT

  • Economic expectations were last this low in November 2008; 8th consecutive decline.
  • Looking at the headline indicator, Germany could be in recession already.
  • Germany may have negative growth in Q4 2011, and Q1 2012.
  • Could be a very soft recession for Germany.
  • Uncertainty about possible solutions for debt crisis is the main driver for uncertainty.
  • Majority of investors still see unchanged ECB rates for the next 6 months, but more than 1/3 expected a cut.

Roubini says EUR needs to fall below 1 USD and ECB needs to cut interest rates for Eurozone crisis solution.

Posted: 18 Oct 2011 02:13 AM PDT
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