Forex Market Updates & Commentary

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• Fed’s Fisher says, “NO QE3″
• NZDUSD back in the non trending range
• NAHB Housing Market Index Rises to 29 vs 26 Survey and Prior of 25, Best Number Since June 2007
• Feds Fisher: I am in favor of breaking up the 5 largest US banks
• Feds Fisher: Im in Favour of Breaking Up the Five Largest US Banks, They Are Too Big To Fail
• GBPUSD tests 100 day MA at 1.5679
• Industrial Production in the US Slides
• Total TIC Flows Rise,Long Term TIC Flows Fall to 17.9B
• Is the EU/IMF influencing the political process in Greece? EURUSD tumbles on Greece uncertainty
• US Empire Manufacturing Improves
• Bobbys Corner-Open Market-Feb.15.2012
• EU sources say looking to delay all or part of bailout agreement yet still avoiding a default.
• EURUSD moves back to unchanged on Greece. NZDUSD benefits from better sales data
• The FXDD Forex morning review
• US Empire State Manufacturing Index Data Due at 8:30AM

Fed’s Fisher says, “NO QE3″ Posted: 15 Feb 2012 07:34 AM PST

NZDUSD back in the non trending range Posted: 15 Feb 2012 07:14 AM PST Yesterday I wrote a post on the NZDUSD and the non trending range. The price was looking to break below the bottom floor (it did briefly – see red areas in the chart above) but it failed when the price moved back above the 100 and 200 bar hour MAs (blue and green lines) after the better than expected NZ Retail Sales report. That report sent the pair to new highs and above the meat of the non trending range that has been in place over the last 10 or so days (yellow area). Now the price has moved back below the top ceiling at the 0.8377 level and into the non trending range (yellow area) as risk trades are exited.  If the price can remain below this ceiling it could lead to a test of the 100 and 200 hour MA below (at 0.8328 -34). A break of those levels would target the bottom floor level once again. Non trending markets transition into trending markets. In the case of the NZDUSD the price took a run to the upside and failed.  This is a disappointment for those looking for a trend to develop but it still keeps the potential for a trend intact. The directional break is still up in the air but the failure to extend could swing the pendulum the other way if the price decline can remain below the ceiling and subsequently break below the 100 and 200 hour MA levels.  Eventually it will break. When we do not know, but we do know that risk can be defined against key technical levels.

NAHB Housing Market Index Rises to 29 vs 26 Survey and Prior of 25, Best Number Since June 2007 Posted: 15 Feb 2012 07:00 AM PST

Feds Fisher: I am in favor of breaking up the 5 largest US banks Posted: 15 Feb 2012 06:54 AM PST

Feds Fisher: Im in Favour of Breaking Up the Five Largest US Banks, They Are Too Big To Fail Posted: 15 Feb 2012 06:54 AM PST

GBPUSD tests 100 day MA at 1.5679 Posted: 15 Feb 2012 06:47 AM PST

Industrial Production in the US Slides Posted: 15 Feb 2012 06:15 AM PST Industrial Production Price Index (MoM):    Survey:  0.7%    Actual: 0.0%    Prior:  0.4%   Revised: 1.0% Capacity Utilization:   Survey: 78.6%   Actual: 78.5%   Prior: 78.1%  Revised: 78.6 EUR/USD moves higher on the news.

Total TIC Flows Rise,Long Term TIC Flows Fall to 17.9B Posted: 15 Feb 2012 06:01 AM PST Total Net TIC Flows:  Actual:  87.1B    Prior: $48.6B   Revised: 42.9B

Is the EU/IMF influencing the political process in Greece? EURUSD tumbles on Greece uncertainty Posted: 15 Feb 2012 05:38 AM PST A report that the EU is contemplating a condition whereby they don’t release the next tranche but somehow prevent a default until after the April elections, sent the EURUSD tumbling lower. The report seems to stem from the letter from New Democrat party leader Samaras that said he is committed to target and policies of bailout if he wins the next election.  He did however say that policy modifications might be required for implementation.  This ambiguous stance is likely inherent in his belief that the austerity cuts proposed are really not a good thing or the best way.  Note that he may likely agree changes and cuts have to be made, but he may not agree with mix. The question arises, is the EU/IMF insistence on a potential PM’s acceptance of conditions meddling too much in the politics of the country? Go back to Merkels suggestion that the EU run the finances of Greece. That did not go over well and was quickly shelved.  The insistance that a party leader commit to something he does not fully believe in, may be going too far.  It may be that Samaras thinks he has a better idea and would like to be present that idea to the people for a vote.   If he is to become the next PM, he would be answerable to the IMF/EU then.  To do so now, would be an admission that he agrees with what is being proposed. Samaras would be Papademos. It seems that, believe it or not, a decision may indeed not be possible until after the proposed April election and that a temporary bridge loan may be the solution. The water is getting muddier and muddier. Meanwhile, the EURUSD has tumbled lower and stands below the 38.2% of the last leg lower. That level comes in at the 1.31017 level currently and the correction higher off the low reached 1.3098. Staying below this level keeps the bears in charge.   A move above it and subsequently the 50%  at 1.31127 will dull the bearish case intraday.

US Empire Manufacturing Improves Posted: 15 Feb 2012 05:32 AM PST Empire Manufacturing:    Survey: 15.00   Actual: 19.53    Prior: 13.48B   Employment: 11.8 vs 12.1 New Orders: 9.7 vs 13.7 Prices Paid: 25.9 vs 26.4 Shipments: 22.8 vs 21.7 Future Index: 50.4 vs 54.9 Factory Index: 19.5 vs 13.5

Bobbys Corner-Open Market-Feb.15.2012 Posted: 15 Feb 2012 05:20 AM PST Good Morning: A very interesting overnight session. Greece: Conservative Party leader Samaras stated that a commitment letter pertaining to the new measures for the 2nd bailout package will be sent today. The letter will keep negotiations going, and hopefully the EU’s Finance Ministers can agree to the package-and start by next Monday’s Eurogroup meeting. Iran state TV stated that Iran will cut oil exports to 6 EU nations: Netherlands,Greece,Portugal,Italy, France and Spain.  Portugal’s only refiner, GALP, says that they do not import Iranian oil, so this will not effect them.  Confusing ! China’s Central Bank leader reiterated their support of the Euro, and committed to continuing buying euro denominated assets.  China has always been a supporter of the single currency-as China is always looking for a viable reserve currency besides the USD. World equity markets and US futures are higher. Oil is higher as Iran continues to rattle the international markets.  With WTI at$101.40/bbl. Gold and silver are lso higher today. HAVE A GREAT DAY& GOOD LUCK

EU sources say looking to delay all or part of bailout agreement yet still avoiding a default. Posted: 15 Feb 2012 05:15 AM PST The EURUSD moves sharply lower on the back of the report.  There seems to be ambiguity in the statement. The EU Finance Ministers will have a conference call later today and at that time there is expected to be a Yeah or Nay with regard to the Greek plans.  That is unconfirmed however.

EURUSD moves back to unchanged on Greece. NZDUSD benefits from better sales data Posted: 15 Feb 2012 05:11 AM PST

The FXDD Forex morning review Posted: 15 Feb 2012 04:38 AM PST The Peoples Bank of China (PBOC) Zhou pledges support for the EURO citing the need to have a healthy Europe.  In Greece, Papendreou (PASOK party leader) sent his letter of assurance to the EU/IMF.  New Democrat Leader Antonio Samaras has also drafted his letter of support saying he is committed to target and policies of bailout if he wins the next election.  He did however say that policy modifications might be required for implementation.  Is that ambiguous enough to cause the EU/IMF to reject his commitment?  We will see. Meanwhile the Greek Finance minister says Greece has fulfilled overwhelming part of its bailout obligation.  However, when you are to receive 130 billion, the EU/IMF want full compliance.  The ECOFIN meeting scheduled today to discuss Greece has been cancelled.  They will instead have a conference call.  In EU economic news GDP fell -0.3% vs -0.4% expectations.  In the UK they released their employment report and Jobless Claims rose by 6.9K vs expectations of 3K. The total on the dole rose to 1.6 million which is the highest level since January 2010.  The Unemployment rate remained at 8.4%.  BOE Inflation Report was released and in it they said that there remains substantial uncertainty for the economic outlook.  BOEs King sees inflation falling to 1.8%  and GDP at 3% in 2 years. However he expects growth to be slow in the near term. Japan Machine tool orders fell -6.9% vs -6.6% last month. The surprise QE increase announced yesterday has kept the USDJPY bid. Staying above 78.18 should keep the bullish bias intact. The NZD dollar benefited the most against the dollar as better than expected Retail sales sent the pair higher (+2.2% for the 4Q vs 1.2% expected).  The Swiss ZEW Survey for February improved to -21.2 from -50.1.  This was the highest level in 9 mos. US Empire Mfg Index will be released at 8:30 AM.  Indust Prod and Cap Utilization(+0.7%  and 78.6% expected).  The minutes of the FOMC will be released at 2 PM.

US Empire State Manufacturing Index Data Due at 8:30AM Posted: 15 Feb 2012 04:30 AM PST

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