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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