Forex Market Updates & Commentary

EURJPY finds sellers against 100 hour MA
The dollar falls on risk on buying. Technical levels loom.
AUDUSD moves toward the next target at 1.0371
US Manufacturing Data and Construction Spending Both Better
New Orders and Employment better in ISM report
EURCHF may be helping the EURUSD today
Turkish central bank in the market selling dollars
USDJPY moves closer to the November (i.e., post BOJ intervention) low
EURUSD tests support against 200 hour MA in early NY trade.
Dollar falls as traders flock to risk on 1st major trading day of the year
US Construction Spending and ISM Data Due at 10AM
Kiwi testing daily trend line resistance
Spain says social security system will post a deficit in 2012.
EUR/USD re-testing highs
UK manufacturing PMI (Dec) 49.6 vs. 47.4 expected.

EURJPY finds sellers against 100 hour MA

Posted: 03 Jan 2012 08:11 AM PST

The 100.29 level is the 100 hour MA, and that is well the risk defiing sellers came in and sold the EURJPY ont he last move higher. Looking at the 5 minute chart below, the fall below from the peak, has the pair back in the channel area. A move below the 100.11 (38.2% of the last leg higher), is needed to confirm a possible top (intraday or otherwise). The 100 bar MA on the chart below has been leading the buyers higher. This moving average line (blue line in chart below) continues to be a key level for the pair.

The dollar falls on risk on buying. Technical levels loom.

Posted: 03 Jan 2012 07:41 AM PST

AUDUSD moves toward the next target at 1.0371

Posted: 03 Jan 2012 07:07 AM PST

The AUDUSD is benefitting from the “risk on” move today and trades near the high. The pair is approaching the next target at the 1.0371 level. A move above will next look toward the 200 day MA (green line in the chart below) which comes in at the 1.0414 level today. Keep this level in mind. I would expect that longs would look to pare some gains at the level and sellers might also enter for a low risk trade near the level.

US Manufacturing Data and Construction Spending Both Better

Posted: 03 Jan 2012 07:01 AM PST

Construction Spending MoM: Survey: 0.4% Actual: 1.2% Prior: 0.8% Revised: -0.2%

ISM Manufacturing: Survey: 53.4 Actual: 53.9 Prior: 52.7

September vs August 2011
Prices Paid: 47.5 vs 45.0
Production:  59.9 vs 56.6
New Orders:  57.6 vs 56.7
Backlog of Orders: 48.0 vs 45.0
Inventory Change:  47.1 vs 48.3
Employment: 55.1 vs 51.8

ISM Prices Paid: Survey: 48.0 Actual: 47.5 Prior: 45.0

New Orders and Employment better in ISM report

Posted: 03 Jan 2012 07:01 AM PST

ISM comes in at 53.9, highest since June
Employment 55.1 vs 51.8 also highest since June
New Orders highest since April at 57.6 vs 56.7.
Production is 59.9 vs 56.6 last month
Prices Pair 47.5 vs 45.0 last month
Order backlog 48 vs 45 last month
Inventories 47.1 vs 48.3 last month

Non Farm Payroll on Friday. The concensus is 150K jobs vs 120K last month.

EURCHF may be helping the EURUSD today

Posted: 03 Jan 2012 06:28 AM PST

Today the EURCHF is up despite better PMI data out of Switzerland. The reason may be that the price had declined and tested the 100 and 200 day MAs which had converged at the 1.2140-55 level. Yesterday the price reached a low of 1.2132 but could not muster any selling pressure below and the price bounced. Today, the market continued the upside, moving above the 200 day moving average at the 1.2155 level. It did come down on the better PMI data (see hourly chart below), but has moved back higher over the last 4-5 hours of trading. The price is above the 100 hour MA at the 1.2176 level. I will be watching this level as support currently. Stay above and a test of the 200 hour MA at the 1.2196 level may be in order, with a move above opening up the door for further upside potential.

The rise in the EURCHF may be helping push the EURUSD up today. That pair – as outlined earlier – has marched higher. In NY trade, the price corrected to the 200 hour MA, but bounced off the support (at 1.3010). The action is more two way in NY, but most of the gains from the lows yesterday remain in tact (above the 38.2% level at 1.3038). A break above the high for the day (and topside trendline) is needed for the bulls, however. On the downside, a move below the 1.3000 would not be welcomed by the buyers today.

Perhaps there may be some price clues from the action in the EURCHF today? I will be keeping an eye on both as they may play follow the leader today.

Turkish central bank in the market selling dollars

Posted: 03 Jan 2012 06:07 AM PST

This is according to traders.

The USDTRY reached new highs last week as traders exited the risky currency pairs.

Today, the pair has resistance at the 1.8790-1.8827 level. The 1.8790 is the 38.2% of the move up from the December low. The 1.8287 is the underside of the upward sloping trendline.

USDJPY moves closer to the November (i.e., post BOJ intervention) low

Posted: 03 Jan 2012 05:58 AM PST

The USDJPY contined its move down after falling below the key 100 day MA on the last trading day of the year. The next key support target for the pair comes in against the 76.567 level which was the low following the BOJ intervention in October. The market is likely to pause against the level on the first test. However, on a break, expect stops to be triggered. I will be watching the 76.83 are for signs a bottom may be forming. This is the topside trendline on the hourly chart below. A move above, gives shorts a reason to cover and perhaps some dip buyers a reason to stick their toe in the water. The high for the day at the 76.95 and then the 77.17 level would be the upside targets. The 77.17 area represent the 100 day MA level (blue line in the chart above) and the 38.2% of the move down from the December 28th high to the low reached today (see hourly chart below).

EURUSD tests support against 200 hour MA in early NY trade.

Posted: 03 Jan 2012 05:40 AM PST

The EURUSD rallied today on the back of better data in Europe but has found some profit taking as NY enters. The price is testing support at the 1.3010 level which is the 200 hour MA. Below is the 38.2% of the move up from yesterday’s low to the high today. That level comes in at the 1.30038 level. Stay above and the bullish trend continues. If the price moves below, look for the bullish bias to be a little tainted as traders search for the rhythm of the market in the new year.

Chatter of a possible French downgrade has been in the market which gives the buyers a bit of a cause for pause, but so far the upside is the preferred direction. On the topside. the 1.3052 level (trendline on the hourly chart above) and then the 1.3077 level is the next resistance (see channel on the daily chart below).

Dollar falls as traders flock to risk on 1st major trading day of the year

Posted: 03 Jan 2012 05:15 AM PST

CLICK on CHART for PDF version.

US Construction Spending and ISM Data Due at 10AM

Posted: 03 Jan 2012 04:44 AM PST

Kiwi testing daily trend line resistance

Posted: 03 Jan 2012 03:25 AM PST

The risk pairs are trading on highs with Dow futures currently up 200 points. The New Zealand dollar (NZD) has traded continually higher against the USD today; currently testing trend line resistance around .788o with the next bullish target at .7907. If resistance holds, the daily target to the downside is the 50.0% line.

Spain says social security system will post a deficit in 2012.

Posted: 03 Jan 2012 02:01 AM PST

EUR/USD re-testing highs

Posted: 03 Jan 2012 01:55 AM PST

So far this session the pair has traded between 1.29723 and 1.30072; currently testing resistance at the highs. The market is showing some risk appetite in recent trading with the FTSE +63.69 and Dax +83.31. If support holds the lower target is back to the 38.2% line. A move higher may bring us to 1.3025; a support level from December 21st to the 26th.