Tuesday, January 24, 2012

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

EURUSD holds the support trendline on first test.

Posted: 24 Jan 2012 07:08 AM PST

The EURUSD held trendline support on the 1st test on the hourly chart above.  The price has rebounded to resistance on the 5 minute chart agains the underside of an trendline which was resistance, then support and now may be resistance (see chart below).  The other technical note on the chart below is how the 100 and 200 bar MA (blue and green lines) have turned down after converging and flattening.  This should keep the bias to the downside for the pair today. I would look for sellers up to 1.2990 area (38.2% of the weeks range).  Key time for the EURUSD.  We will see if the market agrees with what the technicals are saying at the moment.

IMF Headlines

Posted: 24 Jan 2012 07:04 AM PST

  • Lowers world growth outlook to 3.3% in 2012 from September forecast of 4%.  Sees 3.9% growth in 2013
  • Without action, debt crisis may force 4% Euro-area contraction
  • 2012 recession in Italy of -2.2% and -0.6% in 2013, Spain -1.7% in 2012
  • Maintains US growth forecast at 1.8%, projects 2.2% for 2013
  • Governments avoid responding to any unexpected growth downturn by tightening policies
  • Eurozone set to enter mild recession in 2012 at -0.5% and resume growth at 0.8% in 2012
  • Japan 2012 growth forecast cut to 1.7% from September forecast of 2.3%
  • China 2012 growth forecast cut to 8.2% from September forecast of 9.0%
  • Sovereign financing stress has increased
  • Global finance system remains fragile
  • Important for Euro-funding area instruments to take direct stakes in troubled banks
  • Intensification of European crisis could lead to world-wide recession

Richmond Fed Manufacturing Index Comes Out Much Higher than Expected

Posted: 24 Jan 2012 06:59 AM PST

Survey: 6, Actual: 12, Previous: 3

AUDUSD tests key support area

Posted: 24 Jan 2012 06:55 AM PST

The 1.0436 is the underside of broken trendline. The 1.0424 is the 38.2% of the consolidative range since July. The 1.0407 is the 200 day MA today.  The AUDUSD has reached a low of 1.0426 and is back above the 1.0436 level currently as traders lean against the key support on the first test.  Should the market rotate back down, a break these levels, it would refute the break to the upside.  Holding the level today, would be bullish for the pair.  Key day today.

On the topside and looking at the hourly chart, the price today fell below the 100 hour MA and the trendline at the same 1.0447 level. This is also a key level for the pair today. Staying below this level is bearish for the pair.  Moving above, is good.

EURJPY pushes against some resistance at 100.88 area

Posted: 24 Jan 2012 06:25 AM PST

USDCAD finds sellers on first test of 38.2% retracement level

Posted: 24 Jan 2012 06:10 AM PST

The USDCAD has moved above the 100 hour MA and moved to test the 38.2% at the 1.0140 level. The 200 hour MA is also in the area at the 1.0145 level.  Traders have used the levels to lean against and take some profits from the sharp move higher. A break above the key levels will likely trigger stops and additional buying.

ON the downside, the 1.0119 level will be eyed as channel support.  Below that 1.0114 is the 38.2% of the trend move higher. If the trend higher has good trader support, keeping the bullish bias above these support levels will be eyed.  On the top, the high on the 5 minute chart corresponded with the topside channel resistance.  This increased the importance of the area (in addition to the hourly resistance).

Lending to banks rose 14.5B Euros in the current week

Posted: 24 Jan 2012 06:00 AM PST

IIF Dallara says we now call on all parties to honour October agreement

Posted: 24 Jan 2012 05:55 AM PST

  • Wants orderly management of Greek debt situation

The prospects for an agreement is becoming less and less likely it seems. Comments from Greek officials this morning pushed the agreement from this week to beginning of March. March 20th is the drop dead date as interest payments are due at that time.

S&P Chambers says Greece will likely be downgraded to selective default

Posted: 24 Jan 2012 05:54 AM PST

  • Having default within the EU does not necessarily destroy credibility in the Eurozone
  • It is not a given there will be a domino effect on other members in the EU

 

EURUSD breaks to the downside

Posted: 24 Jan 2012 05:44 AM PST

The action in the EURUSD has been very up and down for most of the trading day. The price peaked when the better PMI data was released.  The choppiness has converged the 100 and 200 bar MA. The last peak before the recent fall to new day lows held those moving averages (see blue and green lines in the chart above).  The bias is to the downside on the back of the recent move. Traders will not want to see the price move above the 100 and 200 bar MAs. Staying below the 1.2990 level would be even better for the bears/sellers (38.2% level).  Continued momentum to the downside is expected.

The move to the downside has increased the days trading range to around 100 pips. It is still below the 129 pips that is the average over the last 20 days of trading. In other words there still is room to run for the pair.

EU Rhen says EU backs the boosting of the firepower of the Eurozone bailout fund

Posted: 24 Jan 2012 05:38 AM PST

Canada Retail Sales Data Increases to 0.3% from 0.2% Survey

Posted: 24 Jan 2012 05:32 AM PST

Bobbys Corner-open Market-January.24.2012

Posted: 24 Jan 2012 05:25 AM PST

Good Morning:

The euro was firmer in overnight trading-after a report from the Euro Zone pointed to an expanding manufacturing and service sector.  This expansion data was unexpected, and much stronger than expected.
In a move to support local growth-the Reserve bank of India left their benchmark interest rate unchanged, but lowered their reserve ratio, in the hope of bringing more foreign investment to India.  With Europe in crisis mode-the RBI is looking to attract foreign investments that may of gone to the EU or other world business centers instead.

It seems that the Greek government and their bondholders are not able to come to an agreement on how to solve the nations debt crisis.
Finance ministers from Europe have been reluctant to pour more money into Greece.  The finance ministers have been hoping that the bondholders could offer some relief.

Asian equity markets were mixed-Europe is lower-as are US Futures.

Tonight at 9PM EST President Obama will give his “State of the Union” address.

HAVE A GREAT DAY & GOOD LUCK

USDJPY breaks to new month highs.

Posted: 24 Jan 2012 05:08 AM PST

The USDJPY moved above the 100 day MA for the 3rd time in the last 4 days. This time the price has gathered momentum to the upside.  A close today above the 100 day MA will be the 1st close above the key level in the new trading year.  The price surge has taken the price above the 50% at 77.54.  In December the price closed only twice above this level. Staying above this level today should solicit more buying in the pair.

Later today, the Japan will release the Trade Balance for December. The expectation is that for the year the Trade Balance was a net negative. This would be the 1st time that Japan has had a deficit since 1980.

The 78.008 is the next key target (61.8% of the move down)  for the pair on the daily chart. The high since November has been 78.28.

On the downside, bulls looking for a sustained break higher today, will look to have corrections hold the 77.45-50 level today.  This is the 38.2% of the last surge higher in the pair. If the trend is to keep the momentum, holding this retracement area is often a good clue.

USDJPY, EURJPY and GBPJPY gain. Will it continue?

Posted: 24 Jan 2012 04:11 AM PST
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