Forex Market Updates & Commentary

EU source: Germany and France talks proceeding productively
Sarkozy going to Frankfurt to speak with Merkel and Trichet
Bundesbank President Weidmann Speaks in Frankfurt
EURUSD heads to the 100 hour MA test
Forex Basics TODAY at 4:00 PM with Shawn Powell and Jason Galano
Moody’s analyst says expect Greek haircut of 60% for bondholders
US think tank report suggesting the EFSF may not be boosted to the market expectation levels
Ask the Chartist with James Chen – Webinar Today at 10:00 AM ET
EURUSD moving up and down on Eurozone optimism/pessimism
Canada Leading Indicators Down
US CPI Stays at Par, Housing Starts Improve and Building Permits Weaker
Bobbys Corner-Open Market-October.19.2011
EURUSD eyeing 1.3830 and 1.3846 above. 1.3812 below
US CPI, Housing Starts & Building Permits All Due at 8:30AM
Feds Bullard sees surprise to the upside in US GDP

EU source: Germany and France talks proceeding productively

Posted: 19 Oct 2011 07:18 AM PDT

They agree that EFSF cannot access ECB funds.
Many options to strengthen EFSF

Sarkozy going to Frankfurt to speak with Merkel and Trichet

Posted: 19 Oct 2011 07:13 AM PDT

Bundesbank President Weidmann Speaks in Frankfurt

Posted: 19 Oct 2011 07:06 AM PDT

Says:

Trichet dedicated career to European integration
Trichet has led ECB with skill, commitment
Euro is stable currency externally, internally

EURUSD heads to the 100 hour MA test

Posted: 19 Oct 2011 07:05 AM PDT

The 100 hour MA is at 1.3780. The 38.2% of the move up from yesterday’s low at 1.3786. This is a key level for the pair. Typically, there is profit taking buying against the support levels on the test. A break below would target next the 1.3760. Yesterday the price closed at 1.3750 and often the level matters.

It seems in NY that the EURUSD is bearish but overall, the price is still up on the day

Forex Basics TODAY at 4:00 PM with Shawn Powell and Jason Galano

Posted: 19 Oct 2011 06:41 AM PDT

Forex Basics TODAY at 4:00 PM with Shawn Powell and Jason Galano – Register now

Moody’s analyst says expect Greek haircut of 60% for bondholders

Posted: 19 Oct 2011 06:39 AM PDT

…and that no way Greece can avoid a default.

There were reports early this week that banks are prepared for 30%. The 50% has been talked about. Now 60%. If there is a 60% haircut, then banks will need more capital than expected. Where are they going to get it from? EFSF? Does EFSD have enough.Is leverage on top of leverage REALLY the best solution. So it the EFSF insures bonds against default. The bonds are against countries who have high unemployment and will be asked to make further austerity cuts on top of it.

The UK Guardian article put the expectation of 2 trillion in the mind of traders. We will see what comes out in reality.

What is important to realize, nevertheless, is they can say anything and the market can react rationally or irrationally. So understand risk is indeed increased and the market can go either way (it really can!). So follow the technicals. The next key support for the EURUSD is the 100 hour MA at the 1.3780 level.

US think tank report suggesting the EFSF may not be boosted to the market expectation levels

Posted: 19 Oct 2011 06:32 AM PDT

This is just a rumor mind you, but the thought is that the market got a taste of 2 trillion leveraged deal from the UK Telegraph report yesterday. This strategy is full of risk. Remember leverage is what got the debt markets in trouble. So leveraging on top of leveraging is risky.

Ask the Chartist with James Chen – Webinar Today at 10:00 AM ET

Posted: 19 Oct 2011 06:29 AM PDT

Please join us today (Wednesday, October 19) at 10:00 AM ET for FXDD’s Ask the Chartist with James Chen. This free webinar will feature answers to questions from the audience regarding forex trading, technical analysis, and trading strategies. Please click here to register: https://www1.gotomeeting.com/register/180958809 .

EURUSD moving up and down on Eurozone optimism/pessimism

Posted: 19 Oct 2011 06:26 AM PDT

The EURUSD is moving up and down on Eurozone optimism and pessimism. The latest was that France’s Sarkozy says the Euro talks are stuck over relations between EFSF and ECB. This seems to have sent the EURUSD back lower and the price is now looking toward the 1.3812 support level which is the 38.2% of the days trading range. A break of that level will be needed to push the pair lower. On the topside the 1.3830 remains the resistance.

Canada Leading Indicators Down

Posted: 19 Oct 2011 05:33 AM PDT

US CPI Stays at Par, Housing Starts Improve and Building Permits Weaker

Posted: 19 Oct 2011 05:32 AM PDT

Consumer Price Index(MoM): Survey: 0.3% Actual: 0.3% Prior: 0.4%

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

Consumer Price Index(YoY): Survey: 3.9% Actual: 3.9% Prior: 3.8%

CPI Ex Food & Energy(YoY): Survey: 2.1% Actual: 2.0% Prior: 2.0%

CPI Core Index SA: Actual: 226.137 Prior: 226.014

Consumer Price Index NSA: Survey: 224.947 Actual: 226.889 Prior: 226.545

Housing Starts: Survey: 590K Actual: 658K Prior: 571K Revised: 572K

Housing Starts (MoM)%: Survey: 3.3% Actual: 15.0% Prior: % Revised: -7.0%

Building Permits: Survey: 610K Actual: 594K Prior: 620K Revised: 625K

Building Permits (MoM)%: Survey: -2.4% Actual: -5.0% Prior: 3.2% Revised: 4.0%

Bobbys Corner-Open Market-October.19.2011

Posted: 19 Oct 2011 05:19 AM PDT

Good Morning:

The Euro advanced on news that the European rescue fund will get a boost-and that Germany and France support the increased fund size to ease the pressure of the debt crisis in the region.
European assets drew demand, as investors are looking for a resolution by this weekend-when the Euro Zone has a summit planned with their leaders and Finance Ministers.
The markets seem very positive that the EFSF (European Financial Stability Facility) will work, and that European leaders will come to an agrement this weekend.
In Greece this morning-demonstrations that were scheduled for today to protest increased austerity measures has turned violent in the last 1/2 hour.
The programs that took care of the Greek populous from cradle to grave are no longer fiscally possible-and the population is rebelling-but at this time there are no alternatives except to stop these entitlement programs that have sapped the nations coffers.

Most Asian equity markets were higher-and Europe is higher across the board. US Futures are only a few points on the negative side at this time.

Today we have data on CPI and housing-but markets are squarely focused on Europe.

HAVEA GREAT DAY & GOOD LUCK

EURUSD eyeing 1.3830 and 1.3846 above. 1.3812 below

Posted: 19 Oct 2011 05:19 AM PDT

The levels to eye today include the 1.3830 and the 1.3846. The 1.3830 is the 38.% of the move down from the 2011 high reached in May. The 1.3846 level is the 50% of the move down from the August 2011 high.

In early NY trade the price has moved below these levels and is currently trading at 1.3824. THe 38.2% of the days trend like move higher comes in at the 1.3812 and the low in NY just tested that level This is a red flag for me intraday so be cautious. There could be some upside potential. A break above 1.3830 eill be the clue.