Tuesday, March 13, 2012

Forex Market Updates & Commentary

Forex Market Updates & Commentary

Link to Forex News and Commentary by FXDD

USDCNH moves higher today on easing concerns

Posted: 13 Mar 2012 08:03 AM PDT

The USDCNH broke above the 100 day MA for the 1st time since December 15th at the 6.3325 level. The price extension has moved to the highest level in 2012 (6.3406 was the previous high. Today’s high reached 6.3429)  but has backed off and

EURUSD inches higher toward resistance. Can downside momentum continue.

Posted: 13 Mar 2012 07:40 AM PDT

The EURUSD is showing signs of the trend down slowing. The price hit the 50% of the 2012 range, the price has moved above the steep trend channel and is looking to move above the broken channel from earlier today (see chart trendlines above). Now the next hurdle will be the 38.2%-50% of the last leg down between the 1.30779 to 1.30862.  A move above this area says to me the shorts have lost their trend like hold on the market.  Traders who bought the dip against 50% level, will have a decision to make at this level.  Hold on for a break or take the hard earned 20-25 pips and be happy with the counter trend profits.

US Business Inventories Improve, Continue Positive US Data Today

Posted: 13 Mar 2012 07:02 AM PDT

Business Inventories:    Survey:  0.5%      Actual: 0.7%    Prior: 0.4%

Jan. 12 vs. Dec. 11
Business Inventories Breakdown:
Retail Inventories:   1.1% vs  0.5%
Ex-Autos:   0.4% vs. 0.4%
Motor Vehicles:   2.6% vs. 0.6%
Furniture:   0.4% vs. 0.3%
Building Material:   1.1% vs  -0.4%
Food & Beverage:   0.4% vs  0.4%
Clothing:   0.8% vs 0.0%
General Merchandise:   0.3% vs  1.6%
Dept. Stores:  -1.1% vs 1.6%

IBD/TIPP Economic Optimism:     Survey: 48.6      Actual:  49.4     Prior: 47.5

JOLTs Job Openings:  Survey: 3250  Actual: 3376   Prior: 3161     Revised: 3118

EURGBP selling on support levels break

Posted: 13 Mar 2012 06:59 AM PDT

The ERUGBP fell below the 200 hour MA and trendline support and stops were triggered. The break sent the price to the lowest level since March 5th and also helped contribute to the sudden surge higher in the GBPUSD.

The move lower, extended below steep downside trendline. This should have solicited further downside momentum. The failure to extend lower could be an indication of the market going too far too fast.  A move back below the low should not be ignored, however.

GBPUSD reverses course. Trades at new day highs

Posted: 13 Mar 2012 06:42 AM PDT

Boom.  The GBPUSD has reversed strongly with the pair making new highs. The price increase looks toward topside resistance at the 1.5689-96 area. This is the 38.2% of the move down from the March 7th/8th high and low from March 6th.  A move above that level next targets the 1.5716 level which is the 100 hour MA and 50% of the recent move down. Watch the 1.5650-57 level on the downside for support now. A move below this level and all bets are off for increased upside momentum on further squeeze of the shorts.

EURUSD holds support against 50% Fibo support. Correction key now.

Posted: 13 Mar 2012 06:32 AM PDT

The 50% of the 2012 range held support on the 1st test and the price has bounced modestly. The topside resistance now comes in at the 1.30779 to 1.30862 level. This is the 38.2%-50% of the last leg to the downside for the pair (see chart below). A move above this level will lessen the trend tendencies for the pair today. Holding below these levels will continue to put pressure on the dip buyers/longs.  Watch this correction level for further downside clues today.

Spanish Finance Minister says extra 0.5% deficit cut should not significantly impact growth

Posted: 13 Mar 2012 06:29 AM PDT

There is increased concern about Spain over the last few days.  With 23% unemployment/50% youth unemployment, the country is feeling the pressure.

AUDUSD tests the 38.2% of the move up from December

Posted: 13 Mar 2012 06:09 AM PDT

The 1.0474 level is the 38.2% of the move up from the December 2010 low. The price tested that level yesterday (low reached the 1.0472 level) and bounced to the 1.0559 level overnight. The price has since fallen with the dollar strength and is now back down testing the key support.  The second test may not be so lucky with a break next targeting the 200 day MA at the 1.0403 level.

On the topside, look for the 1.0500 to 1.0506 level to hold resistance. This is the 38.2%/50% of the last trend leg down in the pair. On trend like moves, if this area can find sellers, the dip buying longs stay under pressure and this could lead to further downside momentum.

USDCHF moves away from 100 day MA

Posted: 13 Mar 2012 06:01 AM PDT

The USDCHF has been using the 100 day MA as a ceiling area over the last week or so of trading. The price has been able to move above the level but has not been able to close above the level. Today the price is breaking away with the next target at the 0.9260 level which is the 50% of the move down from the 2012 high.

USDJPY approaches Fibo resistance at 82.975

Posted: 13 Mar 2012 05:56 AM PDT

The 38.2% retracement of the move down from the 2010 high comes in at the 82.975 level. This level is being approached (new high comes in at the 82.85 level) and should solicit some profit taking sellers on the first test, with stops on a move above.

Retail Sales come in as expected. Ex Auto better. EURUSD tests Monday lows

Posted: 13 Mar 2012 05:42 AM PDT

The US Retail Sales ex Auto came in better at +0.9% vs +0.7%  expectations. The EURUSD moved to new session lows and tested the lows from yesterday at the 1.3078 level.  The 1.1% headline gain in the Retail Sales was the highest since September 2011 and keeps the idea that the US economy is on a growth trajectory that could lead to further employment gains down the road.

From a technical perspective below the low from yesterday at 1.3078 level, is support at the 1..3053 level. This is the  50% of the move up from the 2012 low.  There should be some support against this level.  On  the topside, bearish traders/shorts will be watching the 1.31058 to 1.3114 level to hold topside resistance. The EURUSD has taken two steps to the downside today.  The first corrected 38.2% (after German ZEW) and this move has yet to have a meaningful correction.

ECB Weidman calls for standard policy should be reinstated as soon as possible

Posted: 13 Mar 2012 05:32 AM PDT

  • Talks on exiting non standard measures going on
  • Growth driven by domestic forces
  • Inflation to exceed 2% in 2012 with inflation expectations remaining firmly anchored
  • Central banks took on considerable financial risks
  • ECB is discussing risks of non standard measures and the side effects of the tools
  • It is important to lead exit discussions

Weidman is a hawk on the ECB board

 

US Retail Sales Figures Prove Positive

Posted: 13 Mar 2012 05:30 AM PDT

Advance Retail Sales:  Survey:  1.1%   Actual: 1.1%   Prior:   0.4%    Revised:   0.6%

Retail Sales Less Autos:  Survey:  0.7%    Actual:  0.9%     Prior:  0.7%   Revised: 1.1%   

Retail Sales Ex Autos & Gas:   Survey:  0.5%    Actual:  0.6%   Prior: 0.6% Revised: 1.0%

Dollar is mixed as NY enters for the trading day. EURUSD down despite better ZEW data

Posted: 13 Mar 2012 05:26 AM PDT

  • The BOJ indicated that it would keep its monetary easing policy in place ( some members voted for an increase in QE) and this helped lead to a reversal of the US dollars fortunes in London trading. The USDJPY reached its highest level since April 27th when in [eaked at 82.77. The high last night came in at 82.785.  The pair approaches key resistance at the 82.975 level which is the 38.2% of the move down from the April 2010 high. This level, should solicit some profit taking selling on the first look for the pair, with stops on a move above.  The USDCNH also rose sharply overnight as worries about China growth has increased chance for further easing by the PBOC
  • In EU news overnight, the ECOFIN leaders have called on Spain to make additional cuts of 0.5% citing that Spain needs a credible fiscal adjustment plan.  There is increased concern about Spain and this has kept the EURUSD under pressure.  In the continuing Greek saga, they said that if the Private participation rate was pushed above 96%, then their deficit to GDP would fall to as  low as 116% by 2020 (how they can forecast 2020 I am not sure).  Meanwhile there was a report that Greece needs to cut government spending by 5.5%/GDP over 2013/14 to meet bailout fiscal targets. The 170 billion was approved by the EU finance ministers.  That payment was in addition to the write off ove 100 billion by the bond holders in the debt restructuring.  Greece also needed to make large budget cuts – all needed to get the debt to GDP reation to below the 120% figure by 2020.  In economic news, the German ZEW index surprised to the upside witht he Econ Sentiment rising to 22.3 vs 10 expected and 5.4 last mo. (highest since June 2010 and up for -55.2 in Nov 2010). The EU ZEW index also rose to 11 from -8.1 last mo. (highest since May 2011). The EURUSD which rose in the early asian session to just above the 50% of the move down from last weeks high, spent most of the late asian and early London session falling back down and opens the NY session near the low floor at the 1.3100 level seen yesterday.
  • Retail sales in the US with the expectation of 1.1% vs 0.4% last month. The Ex auto is expected to come in at +0.7% vs the same value last month.  IBD/TIPP economic optimism index is due at 10 AM with 50 vs 49.4 last month.  Business inventories are expected to show a 0.5% increase and the FOMC is expected to keep rates unchanged when they announce their decision at 2:15 PM.

Bobbys Corner-Open Market-March.13.2012

Posted: 13 Mar 2012 05:23 AM PDT

Good Morning:

Looks like the Bank of Japan will be agreeable to the prospect of additional monetary easing in the future.
Bank of Japan Governor Shirakawa were fairly dovish-as he stated that the BOJ will continue to fight deflation-but that private investors along with the central government must be major players to boost economic growth in Japan.
Some of the biggest obstacles to Japan’s growth will be the rise in crude oil along with the European debt crisis.

We have US Retail Sales data being released at 8:30 AM.  The data is expected to show an increase of 1% after a .4% increase last month. 
We will have to see if the US consumer opened up their pocketbooks this month.
Also-the FOMC is slated to announce their interest rate decision later this afternoon-2:15 PM.

More Republican primaries are on the docket for today.

Asian and European equity markets are higher-as are US Futures.
Oil is higher.  Gold is mixed, and Silver is higher.

HAVE A GREAT DAY & GOOD LUCK
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