Forex Market Updates & Commentary

Italy Senate to approve austerity plan this week
ECB has no comment on speculation of emergency meeting
Market chatter about emergency ECB Meeting
Canada House Price Index Comes out Stronger at 0.2% vs Expected and Prior Figure of 0.1%
EURUSD corrects part of trend move but fails
NY Morning Forex Commentary for November 9th 2011
Canada New House Price Index Data Due at 8:30AM
Greek central bankers says it is imperative that a new Greek government is formed immediately.
German economic council sees ECB rate cut to 1% by the end of 2011, remain at that level though 2012.
Cable completes full hourly retracement.
UK trade balance (Sep) -9.814B vs -8.0B expected. GBP continues sell off following the release.
Risk aversion in play
EUR/USD support from 100 hr moving average
Leaders of the German ruling party will motion next week to increase Germany’s influence at the ECB, according to reports.
Berlusconi tells newspapers he will not run for office in the next election.

Italy Senate to approve austerity plan this week

Posted: 09 Nov 2011 06:17 AM PST

The Senate speaker will ask legislators to pass financial stability law in upper house by end of the week (according to political source)

ECB has no comment on speculation of emergency meeting

Posted: 09 Nov 2011 06:04 AM PST

Market chatter about emergency ECB Meeting

Posted: 09 Nov 2011 05:41 AM PST

This is unconfirmed.

The surge higher in the Italian yields today are likely to be a huge concern to the ECB. The ECB has been buying bonds but their actions have not been Quantitative Easing in that the buying they have been done, has been matched by money being drained equal to the purchase amount. Some feel the ECB has to be more strong in their actions. They also may look to stem the tide of selling that is in the Italian bond market by buying more. The rumor has sent the EURUSD back higher off the lows. A key resistance level on the topside now is the 1.3635 level. This was the low on November 2nd and is wher the top trendline in the channel on the 5 minute chart is found.

Canada House Price Index Comes out Stronger at 0.2% vs Expected and Prior Figure of 0.1%

Posted: 09 Nov 2011 05:30 AM PST

EURUSD corrects part of trend move but fails

Posted: 09 Nov 2011 05:27 AM PST

The EURUSD retraced 50% of the last leg to the downside in the EURUSD and in the process moved above the 1.3652 area which was a key level on the daily chart (see daily chart below). The move higher was not sustainable however, and the price started another run to the downside. The move lower is now back below the 1.3635 level which was the low on November 2nd. The low for the day and the month at the 1.3617 and 1.3607 are the next targets for the pair.

NY Morning Forex Commentary for November 9th 2011

Posted: 09 Nov 2011 04:53 AM PST

Canada New House Price Index Data Due at 8:30AM

Posted: 09 Nov 2011 04:32 AM PST

Greek central bankers says it is imperative that a new Greek government is formed immediately.

Posted: 09 Nov 2011 02:57 AM PST

German economic council sees ECB rate cut to 1% by the end of 2011, remain at that level though 2012.

Posted: 09 Nov 2011 02:42 AM PST

Says Germany may face a mild recession if debt crisis isn’t solved.
Sees 2012 GDP at 0.9% in 2012, exports at 3.2%.
Can’t rule out Euro zone break up if states don’t repair budget, suggest Euro zone fund to help finance debt reduction.
ECB risking its credibility in buying bonds from heavily indebted states.

Cable completes full hourly retracement.

Posted: 09 Nov 2011 02:26 AM PST

The GBP/USD traded nearly 100 pips lower in the last hour after breaking trend line support following a worse than expected September UK trade balance reading; completing a full hourly retracement of the move from Monday’s low to Tuesday’s high. If we see a rebound, we look back to the 200 hour moving average.

UK trade balance (Sep) -9.814B vs -8.0B expected. GBP continues sell off following the release.

Posted: 09 Nov 2011 01:36 AM PST

Risk aversion in play

Posted: 09 Nov 2011 01:27 AM PST

The theme at the current moment appears to be risk aversion with Italian yields up and European stocks down. The USD is trading on session highs against all of the majors.

The EUR/USD broke through the 100 hour moving average, 50.0% (which was the next target), and continued lower through the 61.8% fibo line. It seems that the next target is 1.37083; a level which has shown the pair support earlier this month.

EUR/USD support from 100 hr moving average

Posted: 09 Nov 2011 12:44 AM PST

The Euro has traded off since touching the high of 1.38577. German Chancellor Merkel commented that Italy has to step up austerity efforts, and Italian PM Berlusconi said that he will not be running in the next election. You can see that the pair hasn’t had a close below the 100 hour moving average in 24 hours and is testing it again with the current hourly candle stick; 100 hour comes in at 1.37796. The next bearish target on the hourly chart is 1.37691.