Forex Market Updates & Commentary

USDJPY finds profit takers against the 50% retracement level
USDCHF moves back above 100 day MA
A technical look at the EURUSD, USDCHF, USDJPY and more
Greek PM to decide on Laos resignations before cabinet meeting later today
The Laos ministers offers resignation from coalition government
EURUSD slows decline at the weeks midpoint
The US Trade Deficit widest since 2008
Canada Trade Improves, US a Touch Lower Than Survey
The Forex overnight review
Bobbys Corner-Open Market-Feb.10.2012
EURUSD head lower on Greek concerns. Risk off in the AUDUSD as RBA cuts GDP/CPI estimates
US and Canada Trade Balance Data Due at 8:30AM
Greek Laos Party leader says cannot vote for the bailout agreement
Greek MP Stasinos resigns in protest of austerity package, according to sources.
According to sources, German Fin. Minister says IMF may be ready to take part in Greek aid package.

USDJPY finds profit takers against the 50% retracement level

Posted: 10 Feb 2012 07:12 AM PST

The USDJPY has continued the rally higher today and reached the next target for the pair against the 77.77 level. This is the 50% retracement of the move down from the post intervention high from October 31st 2011 to the low reached earlier this month. This week the price in the USDJPY has ratcheted higher through the 100 day MA, the 38.2% retracement, and now up to the 50% retracement. Having the 50% level there does give traders a reason to sell today into the weekend risk. Bulls on the gains this week, would not like to the see the price break back below the 38.2 retracement level at the 77.35 level. The 77.37 area is also support on the hourly chart below (trendline). Closer support comes in at the at the 77.51 area which is the low for the day (see chart below).

Although there is fundamental reasons to see a rebound in the USDJPY, the pair has not been able to sustain rallies. Traders are fully aware of this and it therefore often leads to quick disappointment if targets to the upside are not breached. Hence it is prudent to be aware of the key technical levels and don’t be afraid to take some profit along the way.

On a break of the 50% the next key target would be the 200 day MA (green line in the daily chart above) at the 78.06 level. The price has not closed above the 200 day MA since April 2011.

USDCHF moves back above 100 day MA

Posted: 10 Feb 2012 06:49 AM PST

THe USDCHF had been consolidating around the 100 day MA for the last 11 trading days. Over that time the price traded above and below the level on 9 of 11 days. The last two trading days closed below the 100 day MA and should have been a trigger for increased downside momentum. The price did dip to new 2 month lows but today has seen a move back to and above the key MA level.

The level comes in at 0.9177 today. A close above this level would twist the bias back to the upside for the USDCHF

A technical look at the EURUSD, USDCHF, USDJPY and more

Posted: 10 Feb 2012 06:38 AM PST

Greek PM to decide on Laos resignations before cabinet meeting later today

Posted: 10 Feb 2012 06:15 AM PST

The Laos ministers offers resignation from coalition government

Posted: 10 Feb 2012 05:48 AM PST

The leader of the Laos party had earlier said that they would not vote for the bailout agreement. What is unclear is if the resignation of the ministers, now allow for a two party coalition to vote for and approve the austerity measures? The initial reaction is for a move below the key 50% week retracement and the 200 hour MA. That level comes in at 1.31738. With the price below, the bias continues its bearish bias.

EURUSD slows decline at the weeks midpoint

Posted: 10 Feb 2012 05:43 AM PST

The 50% of the move up this week and 200 hour MA at the 1.3173 level was tested (and breached) but the price has moved back above level. One has to be mindful of the failure on the break. Traders will be eyeing the level for continued support now. Risk is limited against the level.

The US Trade Deficit widest since 2008

Posted: 10 Feb 2012 05:35 AM PST

The US trade gap widened to the highest level since 2008.
Import were at the highest levels since July 2008 (+1.7% MoM) on Capital Good Demand (highest on record)
Export increased 0.7%
Price adjusted deficit used for GDP widened to 47.7 billion form 47

When the deficit widens it is a subtraction from GDP.

China deficit -23.135 vs -26.872
Japan -6.541B vs -6.207B
EU deficit -9.630B vs -9.728B
Canada -3.877B vs -3.025B
Mexico -4.946 vs -5.514B

Canada Trade Improves, US a Touch Lower Than Survey

Posted: 10 Feb 2012 05:32 AM PST

Trade Balance: Survey: -48.5B Actual: -48.8B Prior: -47.8B Revised: -47.1B

Canada

Trade Balance: Survey: -0.80B Actual: 2.69B Prior: 1.07B Revised: 1.17B

The Forex overnight review

Posted: 10 Feb 2012 05:27 AM PST

The EU/IMF also made it clear that without the desired cuts and without full agreement from the 3 parties in the ruling party, they would not approve the 130 billion
tranche. In early NY trade today, the Laos Party leader(the smallest of the 3 parties in Greece) said they could not vote “for” the austerity package and as a result, the EURUSD had
moved below the 100 hour MA , and 38.2% retracement. The next key target for the pair would be the 50% and 200 hour MA at the 1.31738 level. A move below this level is needed to keep the pressure to the downside. Failure to breach the level will give the dip buyers another opportunity to buy on sale with limited/defined risk. The vote on the austerity program is scheduled for Sunday and although there is a majority, the demands from the EU/IMF that all three parties agree, may still stop the troika money from being released. It is never easy.
In other EURO area news, German CPI fell by 0.4% which was as expected. The YoY measure of 2.3% equaled last months value and is at the lowest level since March 2011. With dual 0.5% increases from last year coming off in the next 2 months, it will likely send German inflation below 2%. This will give the ECB room to ease if a slowing economy warrants.
China Trade Balance rose sharply to 27.2 b but was likely distorted by a 4 day holiday in China. The Yuan rose to the highest level in 18 months against the dollar. China officials will be heading to Washington next week and rising the currency may be as much a reaction to that trip.
IN Australia the RBA cut GDP and CPI targets in 2012. They now see 2012 growth expanding by 3.5% from 4% in 2012. As far as inflation, they estimate CPI inflation to come in at 3% in 2012 vs previous estimate of 3.25%. The news along with “Risk Off” flows from Greece has sent the AUDUSD down from its 6 month high levels
US Trade Balance is due at-48.5 B vs -47.8B last month.
The Univ of Mich Confidence is expected to dip to 74.8 from 75.
In Canada, the their Trade balance is expected to dip to 0.80b from 1.07B last month.

Bobbys Corner-Open Market-Feb.10.2012

Posted: 10 Feb 2012 05:24 AM PST

Good Morning:

The Greek saga continues:

The Euro, commodity and equity markets all took a turn south as we await the results of this weekend’s vote by Greek politicians.
In the latest news, Greece’s far right Laos party stated that they cannot vote for the bailout package. If it binds Greece for 50 years-the Laos party will not endorse the package.
It now appears that the Greek initiatives to shrink their budget will not be sufficient for the EU and IMF. The civil servants union-ADEDY has called a 48 hour strike (again). Mass transit is virtually stopped-and hospital doctors and bank employees are also on strike.

What a mess- The markets may be rocky and spotty the next few sessions.

Equity markets worldwide are lower-as are futures.
Gold,Silver, Oil and most of the commodity world are lower.

HAVE A GREAT DAY-WEEKEND &GOOD LUCK

EURUSD head lower on Greek concerns. Risk off in the AUDUSD as RBA cuts GDP/CPI estimates

Posted: 10 Feb 2012 05:19 AM PST