Forex Market Updates & Commentary

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• USDJPY moving back lower. Tests 100 and 200 bar MA on 5 minute chart
• Chicago PMI comes in at 50. The highest level since September 2008
• EURUSD has trendline and retracement support at the 1.4266 level
• August 31 2009 Forex Market Update
• USDJPY has a volatile session overnight with the initail move lower than back up
• Canada GDP comes out +0.1% a touch lower
• Canada GDP for June and Q2 Annualized due out at 8:30 AM
• Chicago PMI and other regional Manufacturing indices released this morning
• Eurozone CPI Flash Estimate
• Italian retail sales
• Aussie trending lower, approaches 100 hour M/A
• Japan housing starts weaker than expectations
• 8-31 Economic Calendar
• NBNZ Business Confidence
• Aussie Private Sector Credit and Inventories

USDJPY moving back lower. Tests 100 and 200 bar MA on 5 minute chart Posted: 31 Aug 2009 07:01 AM PDT The stronger Chicago PMI failed to reverse the stocks declines. As a result,the USDJPY keeps its downward bias.  The pair is currently testing the 100 and 200 BAR moving average on the 5 minute chart at the 92.97 level.  When the price and moving averages converge it often leads to a move away from this equilibrium level.  A move higher would need to break through the low from last week at the 93.21 level to confirm the upside momentum.  A move lower, has good support at the 92.58 level (61.8% retracement support off the daily chart). The low for the day reache 92.53.

Chicago PMI comes in at 50. The highest level since September 2008 Posted: 31 Aug 2009 06:52 AM PDT Business barometer   50.0  vs 43.4 Prices paid                      50.0 vs  35.0 Production                     52.9  vs 43.3 New Orders                    52.5 vs 48.0 Order backlogs             45.8 vs  32.1 Inventories                    27.5  vs 25.4 Employment                   38.7  vs 35.3 Supplier deliveries       54.6  vs 49.6 This is the 1st reading at 50 or above since September 2008. The New Order component was also above the 50 level indicative of a expansionary Manufacturing base.  . Despite the increase, the stock market continues to be sold off with the Dow down around 100 now.  USDJPY is moving back lower after failing to remain above the 93.21 level (low from last week).

EURUSD has trendline and retracement support at the 1.4266 level Posted: 31 Aug 2009 06:30 AM PDT Trendline support (7 different tests of the trendline) and 38.2% retracment of the move higher from the August 17th low comes in at the 1.4266-67 area.  Look for good buyers against this level.  A break below however, is likely to solicit additional selling in the pair with a 1st target of 1.4225. On the topside, there is the 100 hour MA at the 1.4298 level (blue line in the chart above). The 100 hour MA is going sideways for the last 2 days,  indicative of a non trending market.  Moreover the 200 hour MA is approaching the 100 hour MA (currently at the 1.4280 level). When the 100 and 200 hour MA  converge along with the price, it often is a signal to the market that it is time for a move.  So be aware and watch for breaks.

August 31 2009 Forex Market Update Posted: 31 Aug 2009 06:29 AM PDT Click here to view the embedded video. Good information in today’s show on the change of Japanese Govt and how it will affect the Yen.

USDJPY has a volatile session overnight with the initail move lower than back up Posted: 31 Aug 2009 05:57 AM PDT The Democratic Party of Japan change the political climate in Japan, taking control from the Liberal Democratic Party. This is the 1st large shift in power in over 50 years   The USDJPY initially fell off the news and a shift away from the riskier currency pairs as Asian stocks ended the month on the lows. The Shanghai index fell by 6.74% on the day and was down 22% for the month.  The pair reached a low of 92.53.  The 61.8% retracement of the move up from the 2009 low to the high reached in April.  SInce the bottom the price has rebounded higher.  The pair is testing the low level from Thursday at 93.21. The close from Friday came in at the 93.56 level and this will be the next target on the upside. The 100 hour MA comes in at the  93.76 level currently and represents another upside target level.   On the downside, look for support at the 92.93 to 92.99 level.  This is where the 200 and 100 bar MA on the 5 minute chart is located.

Canada GDP comes out +0.1% a touch lower Posted: 31 Aug 2009 05:31 AM PDT The MoM came in at +0.1% vs +0.2%. THe YoY came in at -3.4% vs -3.0% expectations. 1st quarter fell by a revised -6.1% VS -5.4% last quarter.  The gain for the month is the 1st increase since July 2008.

Canada GDP for June and Q2 Annualized due out at 8:30 AM Posted: 31 Aug 2009 05:26 AM PDT The expectation is for a gain of 0.2% for the month vs a decline of -0.5% last month. The 2Q is expected to show a decline of -3.0%  vs -5.4% for 1Q.  Falling stocks has led to falling oil prices and lower gold and commodity prices this morning.  As a result, the USDCAD has been falling steadily as it tends to be effected by the value of oil and commodity prices.  In addition there are some widespread reports that the Canada GDP was leaked and will be lower than expectations.  This too is contributing to the firmer tone in the USDCAD.  The USDCAD broke through the downtrend line that has been in place since July.  The pair has also moved above the 38.2% retracement at the 1.1048 level. The next target is 1.1105 to 1.1123 - the highs from August.  Above that level is the 50% retracement at the 1.1176 price level.  On the downside the 1.1048 level should hold the the correction levels.

Chicago PMI and other regional Manufacturing indices released this morning Posted: 31 Aug 2009 04:52 AM PDT The Chicago PMI is for an increase to 48.0 from 43.4 last month. This would be the highest level since September 2008 when the index came in at 55.9. The next month it plunged to 38.3 - bottoming at 31.4 in March 2009.  This month will be the 3rd increase in a row.  The index will be released at 9:45 AM The NAPM Milwaukee index for August will be next to be released at 10AM. It too is expected to do better - rising to 49.0 From 45.0 in July.   The index did push up to 50.0 in June but fell back below the important 50 level which is the dividing line between expansion and contraction in the Manufacturing Industry. Finally at 10:30AM the Dallas Fed Manufacturing Index is expected to show an improvement to -14.0% from -25.5% last month.  The percentage value is the difference between the percentage showing decreases from the percentage showing increases.    The low was -57.3% in February 2009.  A reading of -14.0% will be the best since May 2008.  The

Eurozone CPI Flash Estimate Posted: 31 Aug 2009 02:02 AM PDT Eurozone CPI Flash Estimate came in at -0.2%, slightly stronger than the -0.3% expected and the -0.7% prior reading. Eur/Usd made small push prior to number trading up to 1.4292, the pair currently trades at 1.4287.

Italian retail sales Posted: 31 Aug 2009 01:03 AM PDT Italian retail sales m/m came in at -0.4%, weaker than the 0.2% expected. Y/y came in at -0.8%, stronger than the -1.9% expected. No major impact on f/x markets as Eur/Usd trades at 1.4277, relatively unchanged from pre-number trading.

Aussie trending lower, approaches 100 hour M/A Posted: 31 Aug 2009 12:09 AM PDT Aud/Usd has been trending lower for last 6 hours of trading. It is now close to testing its 100 hour M/A which lies at .8360. On this first run down .8360 should be a good level of support. If it does break through its 200 hour M/A lies at .8340 and 50% fibo at .8343.

Japan housing starts weaker than expectations Posted: 30 Aug 2009 10:06 PM PDT Japan housng starts y/y came in at -32.1%, weaker than the -30.3% expected but slightly stronger than the 32.4% prior reading. No major market reaction on number as Usd/Jpy trades at 92.77.

8-31 Economic Calendar Posted: 30 Aug 2009 08:48 PM PDT

NBNZ Business Confidence Posted: 30 Aug 2009 08:01 PM PDT The National Bank of New Zealand Business Confidence reading for the month of August was 34.2; significantly higher than its previous release of 18.7. Kiwi got a light bid on this release.

Aussie Private Sector Credit and Inventories Posted: 30 Aug 2009 06:32 PM PDT The Aussie Private Sector Credit and Inventory numbers came out worse than expected as the AUD moves off session highs against USD. The releases were as follows: Private Sector Credit (MoM) - Survey: 0.2%   Actual: 0.2%   Prior: 0.1% Private Sector Credit (YoY) - Survey: 3.0%   Actual: 3.0%   Prior: 3.4% Company Operation Profit (QoQ) - Survey: -4.5%   Actual: -7.8%   Prior: -7.2% Inventories (2Q) - Survey: -1.1%   Actual: -3.4%   Prior: -1.2%

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Forex Market Updates & Commentary

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• August 28th 2009 FXDD Forex Report - Weekend Edition
• US Government says Iran not fully cooperating with Nuclear program.
• EURUSD moves below the 100 hour MA. Tests congestive and Fibonacci support
• Another fresher look at the GBPUSD
• EURUSD drops for no real reason. New lows reached but mkt bounces.
• August 28 2009 Midday Show
• A thing about Friday’s London close…
• GBPUSD moves below support now. Choppy trade prevails and raises trading risk.

August 28th 2009 FXDD Forex Report - Weekend Edition Posted: 28 Aug 2009 12:57 PM PDT Click here to view the embedded video.

US Government says Iran not fully cooperating with Nuclear program. Posted: 28 Aug 2009 11:50 AM PDT US Government has said that Iran still not fully cooperating with International community with regards to nuclear program. This response seems to be in response to the IAEA report released earlier today which gave a generally positive to neutral report on Iran’s nuclear program.  This may be contributing to the rise in the US dollar over the last 30 minutes.

EURUSD moves below the 100 hour MA. Tests congestive and Fibonacci support Posted: 28 Aug 2009 11:34 AM PDT The EURUSD has moved below the 100 hour MA at the 1.4299 level. THe pair is approaching the 61.8% retracement at the 1.4282 level.  There is also a whole bunch of lows/highs from this area that should slow the descent.  Additional support on a break comes in against the 200 hour MA at the 1.4265 level.

Another fresher look at the GBPUSD Posted: 28 Aug 2009 11:13 AM PDT The GBPUSD pair has spent the last hour or so below the 1.6317 level.    The price has also fallen below the close at the 1.6283 level now and the trendline on the daily chart at the 1.6285 area. These will be a key levels to watch today on the close.    The low for the day remains at the 1.6261.  The low for NY is 1.6266.  Watch these levels too.  A break could lead to another scoot lower.  The market is still open to sharp moves up and down. However, the move back below the 1.6317 level, back below the trendline on the daily chart and closing level from yesterday will keep the bears in the game.

EURUSD drops for no real reason. New lows reached but mkt bounces. Posted: 28 Aug 2009 09:28 AM PDT The EURUSD just fell from 1.4365 to 1.4320 for no apparent reason as the Friday/End of Summer bonanza continues.  The low took out the low for the day and through the 38.2% retacement of the move up from Thursdays low. Of course the market has bounced back from those lows as the market remains in the hands of few and end of week flows continue to dominate.  I continue to warn that anything can happen this afternoon so be aware but also expect that the moves may be quick.  So be prepared.

August 28 2009 Midday Show Posted: 28 Aug 2009 09:15 AM PDT Click here to view the embedded video. Special explaination of how the close of European markets affects the US forex market.

A thing about Friday’s London close… Posted: 28 Aug 2009 08:19 AM PDT I received an email about a comment I made in this mornings Forex video.  The question referred to a comment about “London squaring up for the weekend”.  I thought I would elaborate. London tends to close up shop at 5:00 PM London time. This corresponds with 12 PM NY time.  Each day you may notice that there tends to be some extra activity between 11:00 AM and 12:00 PM.  Part of this has to do with the “forex fixing” that occurs at 11:00 PM NY time.  Think of it as a benchmark rate for pricing.  Sometimes there is some moves in the currency pairs that may be a result of this fixing.  It can cause some volatility in rates just before and just after 11:00 AM.   The period from 11:00 to 12:00 is also when European and London traders go home for the evening.  Since traders may not be able to monitor the positions as closely as they would at the office, they tend to clean up some of the positions during this time period.  Why?  There is more risk when you are not monitoring positions.   The action yesterday afternoon is proof of the risk that can occur when London/Europena traders are in the pubs or at home.   A London trader who was short the EURUSD may have had a big negative surprise when they checked the market from home that evening.    Someone who was long would have been pleasantly surprised.  Whether a winner or loser, the risk was increased. On Friday’s, risk increases for all as over the weekend the market closes for everyone until Sunday night when liquidity returns.  The potential exists for an event that causes the market to move dramatically from Friday 4:00 PM to Sunday 5:00 PM.  It can be anything from a terrorist attack to a natural disaster to a comment from a key central banker in a Sunday newspaper.    When risk increases, smart traders lessen positions.   When they do this, the supply/demand equation can get out of whack in one direction and then reverse and get out of whack in the other direction.  All of which for no apparent reason. Today’s moves in the GBPUSD seems to exemplfy this dynamic.  The price has been up and down with little catalyst behnd the moves.  To me it simply seems to be short term flows in a more illiquid end of summer market.  Standard support/resistance levels are not really slowing the moves.  It just does not have the rhythm that the market “normally” experiences - at least of late.     So traders should remain aware of the dynamics of the daily London close, and in particular the Friday close, and trade accordingly. Normally that means cutting back on positions and be on the lookout for choppy trading conditions.  If you are aware you can prepare and not be surprised. It may frustrate but at least you won’t be as surprised. I hope this helps further explain this market dynamic.

GBPUSD moves below support now. Choppy trade prevails and raises trading risk. Posted: 28 Aug 2009 07:32 AM PDT The GBPUSD moved below the last support line as defined by the 100 hour MA and has moved lower (click here for prior post).  The price has now moved sharply lower, below the close from yesterday at 1.6283.  It has also moved below the trendline off the daily chart which came in at 1.6285.  I should say sell against these levels but the confidence in the Friday market has me very cautious.  Risk is increased with the choppy trade. Be careful and be on the lookout for anything.    I will use the 100 hour MA at the 1.6308 level as upside resistance now.

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Forex Market Updates & Commentary

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• The GBPUSD continues the up and down moves
• August 28 2009 Forex Market Update
• Weaker Income and ho hum Spending send GBPUSD down
• EURCHF and USDCHF testing low levels
• Personal Income and Spending due at 8:30
• Bobbys Corner-Open Market-Aug.28.2009
• EURUSD finds upside resistance today against the 1.4377 level. Lots of additional resistance against 1.4411
• GBPUSD moves higher as NY enters the scene. Support now against the 1.6336 area.
• Swiss KOF
• Eurozone confidence figures mixed
• UK GDP figures stronger, seems market had built in
• Italian PPI
• 8-28 Economic Calendar
• EUR/JPY Hits then Breaks 100hr MAVG
• Japan CPI and Unemployment

The GBPUSD continues the up and down moves Posted: 28 Aug 2009 06:55 AM PDT The GBPUSD found the support against the 1.6317 level (low 1.6325) and moved back higher toward our resistance area at the 1.6388 level (50% retracement) and high for the day at 1.6380 (see earlier post).  Sellers reentered and have since pushed the pair back down to test the support level again.  The 100 hour MA currently comes in now at the 1.6310 level. So I will have to use that level as our key bottom support level on the downside.  I still like 1.6317 as a support from longer term charts and now the 100 bar MA on the 5 minute chart comes in there (see chart above).  So would still continue to be a better buyer on dips with a stop below 1.6310.  A move above 1.6333 gives me a better feeling for longs.

August 28 2009 Forex Market Update Posted: 28 Aug 2009 06:24 AM PDT Click here to view the embedded video. Special look at the EUR/USD

Weaker Income and ho hum Spending send GBPUSD down Posted: 28 Aug 2009 05:48 AM PDT The weaker Personal Income (unchanged vs 0.1% gain expected) and as expected Personal Spending (+0.2%)  has led to a drift lower in the GBPUSD below the support at the 1.6336 level as traders exit some of the risker trades and buy the dollar.   Although the prior month was revised higher for both income and spending, the market may be focusing on 3Q and the revisions will influence 2Q but does nothing for the current quarter.  The drift lower has reached a low of 1.6325.  The  next support comes in 1.6317. This should solicit some buying support.  Watch for a move back above 1.6335 or for a move below 1.6317 to define the next phase.  Admittedly, after the move higher in early NY trade, the drift lower is a bit of a concern.  Activity does seem to be light.

EURCHF and USDCHF testing low levels Posted: 28 Aug 2009 05:37 AM PDT The USDCHF is back testing the old lows (before yesterdays new 2009  low of 1.0531) at the 1.0552 level.  Meanwhile the EURCHF is back testing the key 100 day MA currently at the 1.5160 level. Many traders think this is a level that gets the SNBs attention. A week ago SNBs Weber commented that the SNB was comfortable with a EURCHF rate between 1.5000 and 1.5300.   The 1.5160 level is roughy half way between the two levels. So there should be support.  The moving average has been flatlining at that price for nearly a month suggesting the market is most comfortable at the level as well.  It also suggests that perhaps some break is imminent. We will see.  Last  week the pair tried moving lower but was supported by the 200 day moving average currently at the 1.5135 level.  A move below the 1.5160 level is likely to wander on down toward this level again. A break below this level should lead to further selling in the pair with the chance of a move toward that bottom floor for the SNB at the 1.5000 level at which point a test of the SNB resolve will be pushed.  Be aware.

Personal Income and Spending due at 8:30 Posted: 28 Aug 2009 05:23 AM PDT Consumption accounts for 70% of GDP.  Today the July Personal Spending will be released for the 1st month of the 3Q.  The expectation is for a gain of 0.2%.  This is down from the 0.4% gain seen in June.   Although modest, the market is still starving for positive economic news to suggest the economy is coming out of recession (other than inventory replenishment). Yesterday Consumption showed a decline of -1.0 in the GDP data for 2Q.  This was better than the -1.3% expectation. At the same time  the spending data will be released, Personal Income will be announced. Herein lies the problem as slower employment  and slower income growth is not good for spending down the road. Although Income is expected to increase by 0.1% it comes on the back of a -1.3% decline last month. Although that figure was a give back from an oversized gain of +1.3% in May (due to government stimulus payments apparently), it still represents stagnant income growth.  So the report has the potential to be a good news/bad news report which should keep the activity fairly contained.  Stock market and Friday squaring should provide more of a catalyst for trading absent a big surprise in this data this morning.

Bobbys Corner-Open Market-Aug.28.2009 Posted: 28 Aug 2009 05:19 AM PDT Good Morning: The JPY along with bonds dropped as earnings by Dell and L’Oreal were stronger than expected.  better earnings is another sign that the economic recovery forging ahead. Asian equity markets were mostly higher.  European markets along with US Futures are also higher this morning. Oil, metals and most commodities rose, and copper hit it’s highest intraday price since October 2008. Oil:$73.09                         Gold:$952.40  Today’s data: Personal Income:         exp: .1%         prior: -1.3% Personal Spend:            exp: .2%         prior: .4% U of Mich Conf:              exp: 64.0      prior: 63.2 HAVE A GREAT DAY-GREAT WEEKEND & GOOD LUCK I will be on holiday thru Labor Day-Be Safe & Good Luck

EURUSD finds upside resistance today against the 1.4377 level. Lots of additional resistance against 1.4411 Posted: 28 Aug 2009 05:04 AM PDT The sharp rise in the EURUSD took the pair up to a high of 1.4405.  The last high on August 7th saw the pair trade at 1.4412.  The high close price for 2009 has also been 1.4411.  SO it is not a wonder why the market stalled against the level initally at least.    The market correction overnight took the pair down to the a low of 1.4325.  The 38.2% correction of the move up from Thursdays low came in at the 1.4329 level.  The market tends to slow trend type moves like we saw yesterday against a more modest correction level. The 38.2% test and move higher is standard operating procedure for the price action and the market price has bounced from there.    The pair is running into some resistance against the highs for the day and the high on the next hourly bar after the peak at the 1.4405 level. That level comes in at the 1.4377 level .  Four hourly bars since the peak have stopped at this level. The more times it holds, the greater the significance of the area.  Needless to say, a move above this level is needed to confirm a likely move back toward a test of the key and strong resistance above the 1.4400 level.  Expect some profit taking sellers against the 1.4411 area however on the first move above as there is alot of congestion and market participants are still scratching their heads on the catalyst for the move higher yesterday. In the meantime, look for selling against the 1.4377 level with inital support at 1.4342 - the close from yesterday - and then the low at 1.4325-29 area.

GBPUSD moves higher as NY enters the scene. Support now against the 1.6336 area. Posted: 28 Aug 2009 04:27 AM PDT GDP in the UK was better than expectations this morning (as was Polish GDP by the way) and the follow up from yesterday has kept the GBPUSD better bid.  The London morning saw the price move above the key 1.6317 level which not only was the low close level for most of the June -August period, but also corresponded with the 100 hour MA (at 1.6316).  However, it stalled at the 38.2% retracement of the move down from the August 21st high (this level comes in at 1.6336 - high reached 1.6335).  NY has entered the fray and decided to extend the move back above the 100 hour MA and above the 38.2% retracement level at the 1.6336 level .  The pair is now moving toward the next key resistance price up at the 50% retracement of the last move down which comes in at 1.6391.  Addtional resistance comes in at the 200 hour MA at 1.6406 level.  The high so far has reached 1.6380.  Look for some slowing of move higher, but I would look for support on a corrective dip against the 1.6336/43 area today (i.e. the 38.2% retracement and against the London original high at the 1.6335 level - see 5 minute chart below).

Swiss KOF Posted: 28 Aug 2009 02:32 AM PDT KOF Swiss leading indicator came in at 0.4, stronger than the 0.6 expected. Good number for CHF. At time of release both Usd/Chf and Eur/Chf both were trading close to lows of session with Usd/Chf at 1.0571 and Eur/Chf at 1.5184.

Eurozone confidence figures mixed Posted: 28 Aug 2009 02:06 AM PDT Eurozone business climate indicator came in at -2.21, stronger than the -2.5 expected Consumer confidence came in at -22, weaker than the 21 expected. Industrial confidence came in at -26, stronger than the -28 expected Services confidence came in at -11, stronger than the -17 expected Mixed numbers from Eurozone with consumer confidence usually the emphasis. Eur/Usd did get a lift prior to figures and bullishness continues as it trades at 1.4363.

UK GDP figures stronger, seems market had built in Posted: 28 Aug 2009 01:36 AM PDT UK  preliminary GDP q/q came in at-0.7%, stronger than the -0.8% expected. Y/y came in at -5.5%, stronger than the -5.6% expected. It seems market had positive figures built in as Gbp/Usd rose 40 pips prior to release. Equity markets also at there highs at time of release of figures. Since Gbp/Usd has come off 30 pips tradingf around 1.6300.

Italian PPI Posted: 28 Aug 2009 01:03 AM PDT Italian PPI m/m came in at -0.6%, weaker than the -0.3% expected. Y/y also weaker than expected coming in at -8.5% vs the -8.1% expectation. Eur/Usd has been off from earlier in the session currently trading at 1.4335, 10 pips above its low. No market effect on Italian PPI figures.

8-28 Economic Calendar Posted: 27 Aug 2009 08:38 PM PDT

EUR/JPY Hits then Breaks 100hr MAVG Posted: 27 Aug 2009 05:19 PM PDT The EUR/JPY pair moved to session highs and traded off the 100hr moving average and has now penetrated that indicator and is moving toward the 61.8% retracement of the short of the move since last Friday. The Yen was for sale earlier on USD weakness and then took on a life of its own after the release of lower inflation figures and significantly worse than expected employment report.

Japan CPI and Unemployment Posted: 27 Aug 2009 04:48 PM PDT The Jobless Rate in Japan for the month of July was 5.7%; worse than both its forecast of 5.5% and its prior release of 5.4%. In addition, Japan made these releases: Job-To-Applicant Ratio - Survey: 0.43   Actual: .42   Prior: 0.43 Household Spending (YoY) - Survey: -0.5%   Actual: -2.0%   Prior: 0.2% Tokyo CPI (YoY) - Survey: -1.8%   Actual: -1.6%   Prior: 0.2% Tokyo CPI Ex- Fresh Food (YoY) - Survey: -1.8%   Actual: -1.9%   Prior: -1.7% Tokyo CPI Ex- Food, Energy (YoY) - Survey: -1.2%   Actual : -1.1%  Prior: -1.1% National CPI (YoY) - Survey: -2.2%   Actual: -2.2%   Prior: -1.8% National CPI Ex- Fresh Food (YoY) - Survey: -2.2%   Actual: -2.2%   Prior: -1.7% National CPI Ex Food, Energy (YoY) - Survey: -0.8%   Actual: -.9%  Prior: -0.7% The Yen weakened across the board on this release and continues to trade lower.

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Forex Market Updates & Commentary

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• Dollar getting stronger against the GBPUSD and EURUSD
• AUDUSD bumping against resistance. Watching commodities
• Aug 27 2009 Forex Market Video
• Feds Lacker comments from speech hit the newswires
• GDP better than expected. Initial Claims a little worse. Cont Claims better
• EURUSD watching upside resistance at the 1.4291 to 1.4295 levels
• Bobbys Corner-Open Market-Aug.27.2009
• German CPI comes out higher than expected
• GBPUSD tests the MA resistance on a quick break higher
• USDJPY loses ground overnight. Takes out August low but bounces
• US GDP Due out at 8:30 along with weekly employment claims data
• CBI realized sales (UK)
• UK Preliminary business investment
• Eurozone M3 money supply & Private Loans
• Eur/Gbp continues upward trend

Dollar getting stronger against the GBPUSD and EURUSD Posted: 27 Aug 2009 07:03 AM PDT The GBPUSD broke through the key 1.6187 level and this is leading to increased selling pressure in the pair. The price is testing the low from yesterday at the 1.6158 level.  The next support level comes in at 1.6124 and then 1.6170. The 100 day MA comes in at the   1.5971 level.   This is a key target as long as the price remains below key resistance. For now watch the 1.6187 level.  Staying below this level is key for a more sustained move lower for the pair. Bias to the downside.

AUDUSD bumping against resistance. Watching commodities Posted: 27 Aug 2009 06:31 AM PDT There was some rumblings in the market last night that China may have some stockpiles of commodities which are overflowing. This could lead to some declines in some of the commodity pairs like the AUDUSD. The pair is currently testing 100 hour MA resistance at the 0.8348 level.  The high for the day reached 0.8355.  A sale against a stop at a new high might be a safe play. The CRB index is down -1.41 in early trade aiwth Aluminum and Nickel leading the decline.  Support in the AUDUSD comes in at 0.8310 initially

Aug 27 2009 Forex Market Video Posted: 27 Aug 2009 06:30 AM PDT Click here to view the embedded video. In depth review of the Forex markets today. Choppy trading, see where the good opportunities are by watching this video.

Feds Lacker comments from speech hit the newswires Posted: 27 Aug 2009 05:44 AM PDT  LACKER SAYS EMERGENCY CREDIT AID TO RUN OFF NATURALLY EMERGENCY CREDIT PROGRAMS PRICED TO EVAPORATE’ RAISING RATES HINGES ON STRENGTH OF RECOVERY FED MAY NOT NEED TO PURCHASE ALL $1.25 TLN IN MBS WE CAN LOOK FORWARD TO BETTER TIMES U.S. ECONOMY APPEARS TO HAVE LEVELED OUT SEES IMPROVEMENT IN TRADE, MANUFACTURING RINFLATION PROBABLY WON’T FALL SIGNIFICANTLY HOUSING, AUTOS NO LONGER A DRAG ON GDP Generally speaking , his comments are more positive and are leading to a move into some risk currencies.  USDJPY, GBPUSD and EURUSD move a bit higher.

GDP better than expected. Initial Claims a little worse. Cont Claims better Posted: 27 Aug 2009 05:36 AM PDT The GDP came in at -1.0%  vs -1.5% expected.  The Consumption came in higher at -1.0% vs -1.3% expected. Government also contributed to the better data.  Inventories plunged by a record amount which keeps the inventory correction theme still in play for Q3.  Initial Claims fell to 570K from 580K but higher than expectation at 565K.  The Continuing Claims fell however to 6133K from 6252K and 6242K expectation. The dollar has gotten a bit bid off the data.  However USDJPY held the 200 bar MA on the 5 minute chart at the 93.83 level. The 100 bar MA at the 93.65 level should provide support, with buyers against the level.  Watch these levels for intraday clues.

EURUSD watching upside resistance at the 1.4291 to 1.4295 levels Posted: 27 Aug 2009 05:30 AM PDT The EURUSD has key resistance above at the 1.4291 to 1.4295 level.  The midpoint of the recent move down from the Aug 21st high to the August 26th low comes in at 1.4291. The 100 hour MA comes in at 1.4295 where it has been going sideways for the last 24 hours.   The two key levels increases the importance of the level today.  I would expect sellers against the level.  On the downside, the 1.4206 to 1.4211 level was key support yesterday and will remain key support today.  Before that level comes the 200 hour MA at the 1.4230 level   This level will be the initial support today off the hourly chart.  The 5 minute chart provide some near term support at the 1.4248 to 1.4253 levels where the 100 and 200 bar MA are located.  Yesterdays closing level was at the 1.4254 level.  This adds to the importance of the moving average levels. However take note that the activity in the EURUSD has been choppy with a semi upward bias. reactions to the numbers have been fairly muted.  Overall, not that the data is out, the activity is slowing. The

Bobbys Corner-Open Market-Aug.27.2009 Posted: 27 Aug 2009 05:29 AM PDT Good Morning: The JPY rose as concerns over Chinese production curbs caused concerns that the economic recovery will slow, fueling demand for the safety of the Yen. The US economy probably shrank at a faster pace than originally reported. The main component of the GDP data today is that businesses made large cuts in their inventories. Asian equity markets were  lower-and Europe is mixed at this time.  US futures are slightly higher this morning. Oil$$71.16                    Gold:$950.20    Today’s data: Q2 GDP revised:        exp: -1.5%                   prior:-1% Jobless Claims:          exp: 565K                   prior: 576K HAVE A GREAT DAY & GOOD LUCK

German CPI comes out higher than expected Posted: 27 Aug 2009 05:28 AM PDT The Month on month showed a +0.2% gain vs expectation of 0.0% gain YoY came in at 0.0% vs expectation of -0.2%.  Although higher, the inflation is not expected to be a concern for the time being even though expectation is for an increase into the year end, as the effects of the July to Dec 2008 declines in prices declines due to lower energy/commodities, fall out of the YoY equation.

GBPUSD tests the MA resistance on a quick break higher Posted: 27 Aug 2009 05:09 AM PDT The GBPUSD has made a quick push higher in early NY trade.  The pair has moved above the 100 bar MA on the 5 minute chart at the 1.6205.  The 200 bar moving average comes in at the 1.6219.  A move above will help confirm the short term break.  Look for support against the 100 bar MA now.  If the level can hold, it would give the intraday longs additional confidence for a push higher   The close from yesterday at the 1.6247 is the next upside target. A move back lower has good support at the 1.6187 level.  This was a key support level yesterday. We did break below the level but once the price moved back above the level the market used it again as support.  Today, the level was used as support, broke through, but moved back higher in the same pattern.  This increases the importance of the level as support going forward.    For now watch the support off the 100 bar MA (1.6205). On the longer term chart the price moved below the trendline support yesterday and should stay below this trendline for the bears to maintain some sort of corrective bearish hope.  The level comes in at the 1.6277 level.  Keep this level in mind. The GBPUSD has been in a consolidative range since June with most activity between 1.6317 and 1.6589. .

USDJPY loses ground overnight. Takes out August low but bounces Posted: 27 Aug 2009 04:57 AM PDT The USDJPY has suffered overnight. There was talk of a change in Japan tax laws that would exempt dividend income from overseas units.  The exemption would encourage companies to repatriate funds back to Japan from overseas like the US to take advantage of the tax benefit. This seemed to be the driving theme to the strength in the JPY (decline of the USDJPY).  From a technical perspective the fall took out the previous low reached on August 21st at the 93.42 - falling to 93.37.  This is the lowest level since July 22nd.  However, the pair quickly reversed and this tends to lead to a move back higher as no momentum, leads to shorts getting scared. The correction has taken the pair up to resistance at the 100 bar MA on the 5 minute chart.  Activity at the resistance level is choppy.  A move back below the 93.57 level could see another leg to the downside.  Until then, expect buyers with a move toward the 94.00 a possible upside target.  Confirmation of the upside comes with a move above the 200 bar MA on the 5 minute chart currently at the  93.85 (green line in the chart below).

US GDP Due out at 8:30 along with weekly employment claims data Posted: 27 Aug 2009 04:34 AM PDT US Preliminary GDP for the 2nd quarter is due out at 8:30 along with the weekly Employment Claim data. The GDP is expected to come in at -1.5%.  This is worse than the -1.0% initially reported.  Consumption is expected to be revised lower to -1.3% from -1.2% initially reported (70% of GDP).  Inventories are expected be the main contributor to the more negative reading as companies slashed even more inventories than previously thought.  Ironically, the worse the number may be better for the overall market sentiment as the expectation would be for an even better 3rd quarter as inventories, housing and stimulative measures like Cash for Clunkers increase GDP for the 3rd quarter.  A drop in the GDP will be the 4th in a row. This is the longest period of contraction since records began in 1947.  The number is Q/Q change and then annualized. The Initial Claims data are also due at 8:30.  The expectations for them is for Initial Claims to fall to 565K from 576K last week. Continuing Claims are expected to stay steady at 6243K (vs 6241k last week).  The market is still looking for signs of employment gains.  However, the data continues be somewhat disappointing as jobs still continue to be

CBI realized sales (UK) Posted: 27 Aug 2009 03:05 AM PDT CBI realized sales came in at -16, weaker than the -12 expected.  This should be a bad number for sterling. Sterling sold off 10 minutes prior to release of this number with Gbp/Usd making new lows around 1.6280 and Eur/Gbp making new highs around .8815.

UK Preliminary business investment Posted: 27 Aug 2009 01:36 AM PDT UK preliminary business investment q/q came in at -10.4%, far weaker than the -3.6% expected and also off from prior -7.6%. Not a good number for sterling as Gbp/Usd is of 20 pips so far, trading down to 1.6203.

Eurozone M3 money supply & Private Loans Posted: 27 Aug 2009 01:03 AM PDT Eurozone M3 money supply came in at 3.0%, weaker than the 3.3% expected and 3.5% prior reading. Private loans y/y came in at 0.6%, weaker than the 1.3% expected and the 1.5% prior reading. Overall weak numbers for the Euro as Eur/Usd off about 10 pips to 1.4235.

Eur/Gbp continues upward trend Posted: 27 Aug 2009 12:06 AM PDT Eur/Gbp has been on an steady upward trend since making a low of .8521 on Aug. 17th. A trendline that I put into place at the end of last week is still holding true to form. The overall weakness of sterling is the main cause for the steep ascent of  Eur/Gbp. After a days worth of consolidation (Aug 20-21) both the 100 and 200 hour M/A have turned upward. Look at this trendline as a guide for direction for a break below may mean a major correction is looming. If fit stays above the trend is likely to continue.

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