Tuesday, November 22, 2011

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

USDCHF above and below 200 hour MA

Posted: 22 Nov 2011 07:24 AM PST

The USDCHF fell below the 200 hour MA and 38.2% retracement earlier in the London session, rebounded above level on the dollar rally in the early NY session but is now back testing the level.  The market has a decision to make at the level. Does it want to go higher or lower.

Richmond Fed comes in at 0 better than expected at -2

Posted: 22 Nov 2011 06:59 AM PST

Shipments 1 vs -6 last month
New Orders -2 vs -5 last month
Order Backlog -10 vs -15 last month
Cap Utilization -6 vs -4 last month
Vendor Lead time 5 vs 2 last month
Number of Employees 0 vs -7 last month
Avg Workweek 0 vs -1 last month
Wages 10 vs 5 last month

EURUSD pushes against 100 bar MA in choppy trade

Posted: 22 Nov 2011 06:48 AM PST

The sharp decline to the NY lows, could not be sustained and the price has rebounded back to the 100 bar MA on the 5 minute chart (at 1.3527 area) . The 1.3506 level where the 200 bar MA (green line) and 61.8% are found was a level that accelerated selling on the downside and accelerated the buying on the move back higher.  This level will continue to be eyed as a point where action should occur (either support or a break through).

On the hourly chart below the upward sloping trendline in the chart below held support last week until yesterday when the price fell below.  Since that time, the line has divided the bulls and bears.  That level comes in at 1.3527 currently. A move above is likely to solicit more buying. Staying below could keep a lid with a check of the 1.3506 the intraday value to eye.

The markets are non trending and subject to illiquid trading conditions as the NY Thanksgiving holiday approaches. So trade accordingly.  Patience. Stops defined. Two way action.  Fall in like with the market. Don’t fall in love with the market. Level to level.  If you are a longer term trader, choose your bias and be ready for back and forth action

Italian PM Monti says does nt confirm 2013 balance budget goal

Posted: 22 Nov 2011 06:27 AM PST

Meanwhile EU Barroso says Italy needs to pursue efforts to regain confidence of the markets

EURUSD breaks below 100 hour MA. Will momentum continue?

Posted: 22 Nov 2011 05:58 AM PST

The EURUSD rotated back lower post the GDP data. The price is now below the 100 hour MA (blue line in the chart above) at the 1.3497 level.  Earlier, the price tried to rally above the 200 hour MA but failed when it reached the 38.2% of the move down from the November 11th high.  Will the momentum develop below the 100 hour MA now?

Traders wll be watching the retracement. On the 5 minute trader shorter term traders will likely be eyeing the 1.35064 area. This level corresponds with the 61.8% of the days trading range. The 200 bar MA on the chart is also at the level. If the sharp move down is to continue today, traders will be watching for sellers against the 1.3497 to 1.35064 area.  Staying below is good for bears. A move above takes some of the steam out of the markets decline with 1.3518 to 1.3525 the next correction point. Yesterday the day closed at 1.3488.   

 

Canada Retail Sales better than expected

Posted: 22 Nov 2011 05:44 AM PST

The headline Retail Sales increased 1 %.  Ex Autos +0.5%. Both better than expectations (0.5% and 0.4% expectations).

Cars rose by 2.8% MoM
Food and Beverages increased by 0.2% MoM
Gasoline increased by 0.8% MoM
General Merchandise increased by 0.7% MoM

Despite the better than expected number the USDCAD found support on the dip and has extended the days range to the upside. The market will be looking for momentum to continue for the pair.

The hourly chart has also extended higher above trendline resistance at the 1.0396 level.  Staying above this level keeps the bulls in charge.

Finally on the daily chart, the next key target comes in at the 1.0446 which is channel resistance for the pair. The bias on it is positive having moved above the 61.8% of the last leg down yesterday, and finding buyers against that area today (at 1.03637)

GDP much weaker than expectations. Inventories the cause.

Posted: 22 Nov 2011 05:33 AM PST

Inventories were revised to down -8.5  from +5.4 in the last cut of the GDP. This subtracted 1.55% for the quarter and when compared to the 3Q advance or -1.08% was the major contributor to the decline.

GDP Annualized = 2%
Personal Consumption +1.63%
Investiment -0.10% (Fixed Investment added 1.45%, Inventories subtracted -1.55% )
Net Exports +0.49
Government -0.02%

Since inventories are down, this likely means that inventories will be replenished in the 4Q.  So what is bad for 3Q is good for the 4Q.  However, the GDP growth is not good overall.

Canada Retail Sales Improve

Posted: 22 Nov 2011 05:31 AM PST

Canada Retail Sales:  Survey: 0.5%  Actual: 1.0%   Prior:  0.5%   Revised: 0.6%

Canada Retail Sales Less Autos:  Survey: 0.4%  Actual: 0.5%   Prior:  0.4%

US GDP Falls to 2.0%

Posted: 22 Nov 2011 05:30 AM PST

(Annualized):   Survey: 2.5%   Actual: 2.0%   Prior: 2.5%  

Personal Consumption:   Survey: 2.4%   Actual: 2.3%   Prior: 2.4%  

GDP Price Index:   Survey: 2.5%   Actual: 2.5%   Prior: 2.5%  

Core PCE QoQ:   Survey: 2.1%   Actual: 2.0%   Prior: 2.1%

USDCAD tests topside again in narrow trading range

Posted: 22 Nov 2011 05:30 AM PST

The range for the day in the USDCAD is very narrow. Looking for an extension today.

Germany’s Merkel says markets are exaggerating differences and problems in Eurozone

Posted: 22 Nov 2011 05:24 AM PST

Other comments:

  • Answer to crisis not sufficient yet
  • ECB could not be bazooka in debt crisis
  • Need to change construction on the Euro area
  • Willingness to cede some national sovereignty is needed
  • Exceptional situations that may arise will need the willingness to take exceptional steps.

Germany’s Merkel Speaks at Conference in Berlin

Posted: 22 Nov 2011 05:22 AM PST

Says

  • There isn’t ‘one solution’ for debt crisis
  • ECB cant be ‘bazooka’ in debt crisis
  • Joint Euro-Area bonds aren’t answer to debt crisis
  • Joing Euro bonds may work at end of political union
  • Closer EU political union needed against crisis
  • EU treaty change needed to regain market confidence
  • Euro is stable, has benefited all members
  • EU Treaty change needed quickly
  • Time of living on borrowed money is ending

Bobbys Corner-Open Market-November.22.2011

Posted: 22 Nov 2011 05:18 AM PST

Good Morning:

France’s 10 year bond demanded a 150+ points premium over German bonds-as Europe’s second largest economy is showing more and more signs of slipping.  France’s current borrowing costs are more than 1% more than the equally AAA rated UK.
Investors are commenting that France is not trading like a AAA credit-as it seems that the marketplace has already downgraded France’s credit.
The credit and debt crisis that started in Greece 2 years ago, and spread it’s wings into Spain,Portugal, Ireland and Italy is now setting it’s sights on France.
 
The major rating agencies reaffirmed the US’s credit grade-and the JPY fell-as this reduced demand for the JPY as a safe haven for investors.
With no end in sight for the European debt crisis-investors will be looking for non euro denominated assets.  With the risk of contagion (and now we see the crisis heading to France), along with rising bond yields-the investment community will be very weary as to what European assets they invest in.

Oil, Silver and Gold are all on the positive side.

World equity markets were mixed-and US Futures are slightly posting positive numbers.

HAVE A GREAT DAY & GOOD LUCK

The NY Morning Forex Commentary for November 22nds 2011

Posted: 22 Nov 2011 05:09 AM PST

US GDP & Canada Retail Sales Data Expected at 8:30AM

Posted: 22 Nov 2011 04:08 AM PST

 

 
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