Thursday, February 2, 2012

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

USDCHF tests intraday support

Posted: 02 Feb 2012 07:15 AM PST

The USDCHF has come off and moved below the 100 bar MA on the 5 minute chart above. The next target to get through is the 200 bar MA (green line) . This corresponds with a trendline earlier which was broken on comments from Chinese PM Wen, but was quickly reversed (I will reestablish the old trendline as support)  A break below this key intraday level should solicit stops. Staying above gives shorts a reason to buy with limited risk (sell on the break)

Bernanke see signs economy improving

Posted: 02 Feb 2012 07:04 AM PST

  • Recovery is frustrating
  • Vulnerable to shocks
  • Outlook uncertain
  • Credit remains tight
  • Jobs improved modestly
  • Housing remains depressed.
  • Inflation subdued
  • Current fiscal policies is not sustainable; would create big budget gap

His comments are a little less dovish perhaps.  Driving down the middle of the road as he faces a split audience.  Note that during his press conference after the FOMC, he was  a bit more brave with his dovish views.

anBernanke Sees Signs Economy is Improving and Fiscal Policy Risks

Posted: 02 Feb 2012 07:01 AM PST

  • Large and increasing level of government debt runs risk of serious economic consequences
  • Long way before labor market can be said to be operating normally
  • Fed will continue to monitor situation in Europe closely, and take every available step to protect US financial system and economy
  • There are concerns that have been weighing on US business investment
  • Inflation has declined and Fed expects it to remain subdued
  • Signs economy has declined and Fed expects it to remain subdued

EURUSD trades between the Goal Posts. Looks for break

Posted: 02 Feb 2012 07:00 AM PST

EU’s Rehn on the Wires

Posted: 02 Feb 2012 06:50 AM PST

Says:

  • Euro governance to be determined this year
  • Closer economic union to complement monetary union
  • Recession to be ‘much nastier’ if crisis not resolved
  • EU going through a ‘mild recession’
  • EU undertaking reformation of Europe’
  • Portugal making ‘good progress’ on fiscal reforms
  • Greek PSI agreement by the end of the week
  • Greece must make ‘decisive progress’ on reforms

 

AUDUSD looks to break higher intraday

Posted: 02 Feb 2012 06:31 AM PST

EURUSD trades between the “Goal Posts”

Posted: 02 Feb 2012 06:03 AM PST

The EURUSD is trading between what I call the Goal Posts (between the 100 and 200 hour MA’s in the chart above). The pair moved higher in the late London morning on comments from China Premiere Wen who said China was exploring helping in the ESM/EFSF mechanisms. However, he later commented that he was not sure how. EU’s Juncker sent the EURUSD to the NY lows on comments that Greece PSI talks were ultra difficult. This sent the price down to test the 200 hour MA vut the price could not close below that level.

Now with the price higher and off the 200 hour MA (green line in the chart above), the pair has found initial resistance against the midpoint of the weeks trading range at the 1.3125 level. A move above that level will target the 100 hour MA at the at 1.3143.  A break above that level targets the topside trendline at the 1.3191 level currently.

Holding below the weeks midpoint (look for sellers against the level) should send the pair back down to test the 200 hour AM at the 1.3095 level currently. A break of it, will next look toward the 1.3076 level and then the lows for the week at 1.3041 (Tuesday’s low)  and 1.3025 (from Wednesday).

The week is a non trending week. Bernanke speaks at 10 AM ET which could ignite some action. The Fed Chair has been dovish and will likely continue to express this sentiment in Washington today.  Hints of QE3 have sent stocks higher and with it the EURUSD but in this market filled with news (and unemployment tomorrow) it is always best to follow the key technical levels and define risk against those levels.

EURUSD falls on no Greece solution.

Posted: 02 Feb 2012 05:33 AM PST

Jobless Claims Data Improves

Posted: 02 Feb 2012 05:31 AM PST

Jobless Claims:  Survey:  371K    Actual: 367K   Prior: 377K    Revised:  379K   

Continuing Claims:  Survey: 3535K    Actual:  3437K    Prior:3554K   Revised: 3567K

EUR/USD moves higher on the news

Nonfarm Productivity:    Survey: 0.8%    Actual:  0.7%    Prior:  2.3%     Revised: 1.9%

Unit Labor Costs:    Survey:   0.8%    Actual:  1.2%    Prior:  -2.5%  Revised: -2.1%

Challenger Job Cuts Comes in Higher 38.9% vs 30.6% Prior

Posted: 02 Feb 2012 05:20 AM PST

No Greece solution, lower EURUSD today. Dollar mixed.

Posted: 02 Feb 2012 05:01 AM PST

CLICK on picture for FULL SIZE PDF.

The FXDD overnight review and preview

Posted: 02 Feb 2012 04:45 AM PST

The dollar opens the NY session mixed but with little changes from yesterday's closes. EU PPI came in at -0.2% MoM and 4.3% YoY which was close to expectations. Spain registered jobless climbed by the most in 3 years (+177,470 jobs lost in the current mo.).  The total unemployed is the most since January 2009 and was higher than the estimate of 127K.  The UnE rate is 22.9%.  What helped the EURUSD in London trade was a comment by Chinese Premiere Wen who said that China is considering greater involvement in EFSF/ESM.  However, the spike higher was quickly reversed. The early NY decline was attributed to a comment from EU Juncker who said the Greek PSI talks are "ultra difficult".   In the UK Construction PMI fell to 51.4 from 53.2 last mo(below exp of 52.5). Japan vehicle sales were up 40.7% YoY. The USDJPY and EURJPY reversed back down after the gains yesterday &the low of 76.56 is in trader's sites. The Swiss Trade Balance declined to 2.07B from 2.95B last mo.(est. 2.5B), however, the Swiss exports rebounded by 6.1 after declining by -4.8% last mo. Imports increased 7.6% after declining 8.2% last mo.  Despite the gains, with the spending cuts in the EU &the high value of the CHF franc, the export market is not likely to experience a resurgence of growth. The EURCHF reached new lows since September 2010 yesterday.  The low reached 1.2030.  The 200 day MA currently comes in at 1.2057. A close above that level is needed to solicit more buying interest.  In the US today, the Challenger Job Cuts rose by 38.9% YoY. Employers planned on cutting 53,486 jobs which was the highest number since Sep2011.  Non Farm Productivity is expected to rise by 0.8% vs 2.3%.  The Unit Labor cuts are also expected to rise by 0.8%.  Intial Claims are to decline to 371K from 377K according to Est.

Irish Central Bank cuts 2011 GDP growth to 0.8% from 1.0%.

Posted: 02 Feb 2012 03:03 AM PST

  • Sees 2013 GDP increasing to 2.1%.
  • Cuts 2012 GDP forecast to 0.5% from 1.2%.

Merkel says China says that Europe must do its homeowrk first on the Eurozone crisis, then ready to work for a stable Euro.

Posted: 02 Feb 2012 02:41 AM PST

Euro rises after China’s Premier Wen says China is considering greater involvement in the EFSF and ESM stabilization funds.

Posted: 02 Feb 2012 02:35 AM PST
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