Forex Market Updates & Commentary

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• A good one. Mark Haines… Peace to you and to your family
• Geithner on the Wires
• ECB Starks says global economy very far from sustainable growth
• Focus shifts back and forth in the EURUSD
• EU Commissioner Damanaki says Greece Eurozone Membership at risk
• ECB Stark says crisis is not over
• ECB Draghi sees serious downside risk to growth
• Geithner says several more years to go on housing
• ECB Draghi says response to crisis has been effective
• The NY Morning Forex Commentary for May 24th
• US Durable Goods Orders Fall 3.6%
• US Mortgage Applications rose 1.1% on week
• US Durable Goods Orders Data Due at 8:30AM
• S&P’s Cullinan on the wires…
• Irish Minister Howlin says economic outlook still highly uncertain

A good one. Mark Haines… Peace to you and to your family Posted: 25 May 2011 07:06 AM PDT Mark Haines brought humanity to business news. He was tough at times.  He was emotional at other times. That made him more human then others.  The tearful good bye to Erin Burnett just a few days ago will be remembered.  The way he broadcast September 11th will be remembered.   God bless his family

Geithner on the Wires Posted: 25 May 2011 06:31 AM PDT Says: People see a very tough economy today U.S. has ‘several more years to go’ on housing Unemployment to come down ‘ too slowly for everybody’ ‘War of attition’ against financial freedom Some seeking to ‘starve’ agencies of funding New financial reform rules need ‘traction’ ‘Dark forces’ working against financial reform Seeks to ‘unfreeze’ congressional confirmation ‘ A lot of prgress’ toward corporate tax reform He ‘absolutely’ wont preside over U.S. default Sees bipartisan pragmatism on fiscal issues Congress leadership understands debt Some pretending not to understand debt ceiling Congress leaders understand debt ceiling necessity ‘This is all theater’ on debt ceiling dispute Deficit issues don’t need to be solved all at once U.S. deficits unsustainably high now Sees ‘lots of paths’ to reasonable fiscal deal Europe still has ‘very serious problem’ Problem is within Europe’s capacity

ECB Starks says global economy very far from sustainable growth Posted: 25 May 2011 06:31 AM PDT Tackling debt industrial nations greatest challenge ECB has begun to retrace loose monetary policy Too loose policy leads to asset bubbles European recovery mostly self sustaining Greece needs drastic turnaround of economic policy Higher inflation driven by energy prices

Focus shifts back and forth in the EURUSD Posted: 25 May 2011 06:27 AM PDT Focus on Greece. Focus on weak US. Focus back on Greece.  The latest move lower was prompted by the comment from the EU commissioner who said that Greece must adhere to strict guidelines or get out of the Eurozone.  The EURUSD prior to that move higher on weaker US data in the form of Durable Goods. Yesterdays close came in at 1.4198. Staying below this level will be an important price on the topside.  The midpoint of the days range 1.4059.  If it can stay below that even better for the bears. Activity is very choppy in the session today.   This may break out but be careful. It is not an easy trading environment.

EU Commissioner Damanaki says Greece Eurozone Membership at risk Posted: 25 May 2011 06:16 AM PDT Greece Eurozone membership at risk (as per Athens News Agency). He adds that Greece must adhere to tough measures or return to the Drachma

ECB Stark says crisis is not over Posted: 25 May 2011 06:08 AM PDT But, says that Germany feels the crisis less than other countries

ECB Draghi sees serious downside risk to growth Posted: 25 May 2011 05:47 AM PDT Need more fiscal disciplne to foster growth Global monetary conditions are accomodative Inflation expectations must remain well anchored Inflation remains a challenge Must avoid unmanaged failure of banks

Geithner says several more years to go on housing Posted: 25 May 2011 05:46 AM PDT Also adds that unemployment to come down too slowly for everybody. Sees a very tough economy today. The administration has become increasingly more cautious about the economy as the effects of higher oil prices takes its toll on all. The Durable Goods orders number today is testament to the negative. Granted, the prior month was strong, but this months fall was weak across the board. The dollar has started to be pressured a bit with the GBPUSD making new highs for the day. THe EURUSD moves closer to erasing the declines for the day. The close yesterday came in at 1.4098. Look for some resistance against there on the first test but a move above would be bullish for the EURUSD and should lead to further dollar selling.

ECB Draghi says response to crisis has been effective Posted: 25 May 2011 05:37 AM PDT

The NY Morning Forex Commentary for May 24th Posted: 25 May 2011 05:31 AM PDT

US Durable Goods Orders Fall 3.6% Posted: 25 May 2011 05:30 AM PDT Durable Goods Orders:   Survey: -2.5%    Actual: -3.6%   Prior:2.5%    Durables Ex Transportation:   Survey: 0.5%   Actual: -1.5%   Prior: 1.3%

US Mortgage Applications rose 1.1% on week Posted: 25 May 2011 04:36 AM PDT The Purchase index showed an increase of 1.5% The Refinance Index rose 0.9% The 30 Year Mortgage rate rose to 4.69 % from 4.60%.  A year ago it was at 4.8% The 15 year Mortgage rate rose to 3.78% from 3.75%.  A year ago it was at 4.25%

US Durable Goods Orders Data Due at 8:30AM Posted: 25 May 2011 04:29 AM PDT

S&P’s Cullinan on the wires… Posted: 25 May 2011 03:14 AM PDT Irish growth prospects “modest”; public finances are “weak”. A Greek restructuring would not automatically mean an Irish downgrade. No fundamental change to Ireland’s position since last rating move; increase in corporate tax rate could be negative for rating. If Ireland was unable to tap capital markets at an appropriate price, that would be an issue. Format of ECB support for Irish banks are not a key rating factory.

Irish Minister Howlin says economic outlook still highly uncertain Posted: 25 May 2011 02:23 AM PDT Adds that there is no reason to cut growth forecast; hopes to re-enter bond markets next year.

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Forex Market Updates & Commentary

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• EURUSD makes new highs
• New home sales 323K higher than expected. Richmond Fed comes in -6 (Weak)
• Existing Home Sales and Richmond Fed Index to be reported at 10 AM ET
• Fed’s Hoenig (hawk and non-voting member) on newswires
• Greek default swaps soar to record
• GBPUSD tests 100 hour MA resistance at 1.6172. 100 day MA eyed too
• EURUSD tracking slowly above the 100 bar MA
• Silver moving higher away from 100 day MA
• The NY Opening Forex Commentary for May 24th/FXStreet Webinar at 11 AM/Traders Education 4 PM
• ECB’s Bini Smaghi
• Euro falls after Greek opposition leader Samaras says rejects new austerity plan.
• Lipstok on the wires………………….
• $/CAD testing hourly resistance @ .9769
• EU ind. new orders -1.8% vs. the expected -1.1%
• UK Public Sector net borrowing

EURUSD makes new highs Posted: 24 May 2011 07:16 AM PDT

New home sales 323K higher than expected. Richmond Fed comes in -6 (Weak) Posted: 24 May 2011 07:00 AM PDT The Home Sales data is better than expected and the supply of homes is down to 6.5 months. This suggests that supply is being sopped up. Meanwhile Richmond comes out much weaker at -6 vs 9 expected. This is the lowest level since april 2009. Shipments -13 vs 6 last month New Orders -15 vs 10 Order backlog -19 vs -1 Cap Util. -12 vs 2 Vender Lead time 5 vs 18 Employ 14 vs 14 Avg workweek 0 vs 7 Wages 6 vs 22

Existing Home Sales and Richmond Fed Index to be reported at 10 AM ET Posted: 24 May 2011 06:56 AM PDT New Home Sales are expected to show an unchanged reading of 300K. The month supply came in at 7.3 months last month, down from 8.2 months in February.  There is little incentive for New Home construction with the supply of foreclosed properties still high. The Richmond Fed Manufacturing Index is expected to show a decline to 9 from 10 last month. The recent high was 25 in February and December. The higher oil/commodity prices has kept the indices more on the weak side of late not just in the US but globally as well. Overall, the data should be weaker which could keep the dollar on the defensive. With key techinical levels in the EURUSD (at 1.4112) and the GBPUSD (at 1.6172).  The market may tip it’s hand.  Be prepared for some added volatility as the key levels influence.

Fed’s Hoenig (hawk and non-voting member) on newswires Posted: 24 May 2011 06:53 AM PDT Feds Hoenig says banks should be confined to loans and deposits and not trading.  He does not comment on the economy or interest rates, but may comment in any Q & A session afterwards.  Hoenig is a hawk (advocates higher rates) but is an non voting member of the Fed board.

Greek default swaps soar to record Posted: 24 May 2011 06:36 AM PDT A report on the newswire says that Greek default swaps have soared 96 basis points to a record level.  This increases the chance of default to 71% within 5 years. The chart below shows the yield on Euro 5 year bonds. The Greek 5 year bonds are making new highs today. With the EURUSD up on the day and near the high, the market seems to be comfortable with the situation. However, for bears, the rally may be an opportunity. As most of those who follow me know, I require a technical reason to trade.  The price has found resistance against the 38.2% of the move down from the May 20th highat the 1.4112 level on two occasssion today.  This techinical level helps define risk in case the market ignores the spike in rates and the credit default spike higher, and instead focuses on other fundamental influences (or technical influences) that may force the price higher. The market does not always do what it should do.  As a result, defining risk with a technical level is ways to keep risk to a minimum and avoid large losses in your trading.

GBPUSD tests 100 hour MA resistance at 1.6172. 100 day MA eyed too Posted: 24 May 2011 06:21 AM PDT Earlier today this MA was tested and the market found sellers. The pair is back up testing again at the 1.6172 level.  This level has the 50% Fibo level at 1.6180 right behind it. This makes the area a difficult nut to crack but will likely encourage the bulls if broken.  Until then however, the temptation to take profit should keep the market balanced. The GBPUSD is up despite a higher government deficit and a Moody’s potential downgrade of 14 UK lenders.  Typically, this would solicit sellers but the price rebounded sharply off the lows. Another key level to watch as we head toward the close, will be the 100 day MA. That moving average comes in at 1.6160 today. Yesterday was the first close below the MA level since January 11, 2011.  The lack of follow through selling is a disappointment today.  A close above the level will encourage the shorts to perhaps cover their positions and wait.

EURUSD tracking slowly above the 100 bar MA Posted: 24 May 2011 06:03 AM PDT The EURUSD is slowly moving higher today tracking the 100 bar MA in the process. The pair found earlier resistance against the 38.2% retracement of the move down from the May 20th high. That level comes in at the 1.41124 level. A move above this level will be needed to keep the bulls in charge.  So the bias is bullish. The target at the 1.4112 level needs to be breached.

Silver moving higher away from 100 day MA Posted: 24 May 2011 05:49 AM PDT The Silver bottomed on May 12th at the 32.31 level, 11 cents short of the 50% retracement of the move up from the Feb 2010 low to the high.  The price is also moving away today from the 100 day MA which comes in at 35.07 today. Staying above this level keeps the bulls in charge. The hourly chart show consolidation with the 100 and 200 hour MA converging with the price in late trading yesterday. The price in the Far East session started to use the 100 hour MA as support and has since pushed away from the 100 hour MA. Typically, when the 100 and 200 MA converge with the price, you get a move away. That move is choosing the upside.  The next target is the high from May 13th at $36.44. A move above this level opens the door for $37.31 and the $37.96 level. All represent points where the price had resistance or support since the beginning of May.  The 38.2% retracement of the move down from the April 28th high at $49.49 comes in at $38.87 and also remains a potential target, if the price is able to remain above the 100 hour MA and continue to reach and surpass the respective targets along the way.

The NY Opening Forex Commentary for May 24th/FXStreet Webinar at 11 AM/Traders Education 4 PM Posted: 24 May 2011 05:15 AM PDT

ECB’s Bini Smaghi Posted: 24 May 2011 03:35 AM PDT ECB will do whatever is needed to hit inflation goal; will ensure inflation goes back under 2%. Greek debt haircut not inevitable, would only make problems worse. Successful Greek program includes hard steps at the beginning.

Euro falls after Greek opposition leader Samaras says rejects new austerity plan. Posted: 24 May 2011 03:07 AM PDT

Lipstok on the wires…………………. Posted: 24 May 2011 03:00 AM PDT Restructuring of Greek debt is a question that shouldn’t be on the table any more. It’s a problem that Greece hasn’t done enough to carry through fiscal repair measures, has fallen behind schedule. Essence reprofiling would still be the same as restructuring and that is not on the agenda.

$/CAD testing hourly resistance @ .9769 Posted: 24 May 2011 02:16 AM PDT The pair is having trouble breaking upward through the 23.6% line. If resistance holds, .9755 is the bottomside target; a move higher could see us towards .9792.

EU ind. new orders -1.8% vs. the expected -1.1% Posted: 24 May 2011 02:01 AM PDT

UK Public Sector net borrowing Posted: 24 May 2011 01:35 AM PDT Public Sector net borrowing came in at 7.7B, greater than the 4.4B expected. Gbp/Usd slipped 20 points to 1.6130 on heels of release.

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Forex Market Updates & Commentary

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• “The Traders Bookshelf” on FXStreet. I will be talking about Attacking Currency Trends tomorrow 11 AM ET
• EURUSD continues trend day alive
• NY Morning Forex Commentary for May 24th
• The Forex Week Ahead
• ECB’s Ordonez
• EUR/JPY receiving support from previous lows
• Fitch analyst says no change seen at the moment for outlook or rating on Italy.
• EU’s Rehn
• SNB declines to comment on currency market intervention
• Eurozone manufacturing PMI: 54.8, Services PMI 55.4
• German man. PMI 58.2, serv. was 54.9
• German data at 3:30
• EUR$ completes full hourly retracement
• ECB’s Nowotny
• ECB’s Weidmann

“The Traders Bookshelf” on FXStreet. I will be talking about Attacking Currency Trends tomorrow 11 AM ET Posted: 23 May 2011 06:11 AM PDT The interview will occur tomorrow at 10:00 AM ET/15:00 GMT.  I look forward to the interview, and thank the people at FXStreet for asking me to kick off this new exciting program for the retail trader.  You do need to register to attend.   Go to: http://www.fxstreet.com/webinars/sessions/session.aspx?id=eaaa26d5-8293-4aff-bbdd-fc7e007c3d18

EURUSD continues trend day alive Posted: 23 May 2011 05:30 AM PDT The EURUSD moved lower on Friday - staying below the 100 bar MA on the 5 minute chart. The opening today came in below the 1.4150 level which is the 38.2% of the 2011 low to high range. The price never rose above this level and has continued the trend down today. In the last hour or so, there was the most serious correction of the day. The price moved up to test the 100 bar MA (see 5 minute chart above) and the 38.2% of the move down from today’s high at the 1.4036 (high reached 1.4038). Momentum dies, and the price has moved back below the 1.4000 level. The next key level of support for the pair comes in at the key 100 day MA. That level comes in at the 1.3966 level and was tested this morning at 1.3968. The initial bounce off the key level held and I would expect a battle against the level should the price decline continue in the NY session. A move below, however, should not be taken lightly. The price has been above the key moving average since February 15th.

NY Morning Forex Commentary for May 24th Posted: 23 May 2011 05:00 AM PDT

The Forex Week Ahead Posted: 23 May 2011 04:26 AM PDT

ECB’s Ordonez Posted: 23 May 2011 02:56 AM PDT Spain has to recognize it has problems; must tackle massive unemployment. International financial crisis is not Spain’s biggest problem, deep spending cuts are necessary in Spain. Spanish central gov’t and regional gov’t must meet deficit target. Caja restructuring to be completed as forseen; Spain bank problems affect part of system. Inability of Eu to solve problems partly to blame  for higher financing costs. Spain can only cut risk premium with reforms. Spain’s spread over 200 BPS cannot be accepted for a long time.

EUR/JPY receiving support from previous lows Posted: 23 May 2011 02:48 AM PDT We’ve seen a sell-off in the euro against all of the major currencies this session. See here, the pair was testing resistance at the 200 hour moving average and then moved lower and completed a full hourly retracement. Following that, the pair has sold off another 100 points where it appears to have found some support from 113.85; a previous support level. If the rebound continues, we look back towards 114.90 as the target.

Fitch analyst says no change seen at the moment for outlook or rating on Italy. Posted: 23 May 2011 02:14 AM PDT

EU’s Rehn Posted: 23 May 2011 01:42 AM PDT We must be firmer in implementing reform. Economic recovery in Europe is maintaining momentum. Growth is becoming more balanced, self-sustained. There is no Euro crisis; it is a crisis of states. Have contained crisis to three countries. Needed to prevent Greek default to avoid downward spiral. Greece has to seriously reinforce budget steps, structural reforms before new steps taken. Expects Greek government to announce new steps shortly.

SNB declines to comment on currency market intervention Posted: 23 May 2011 01:31 AM PDT

Eurozone manufacturing PMI: 54.8, Services PMI 55.4 Posted: 23 May 2011 01:01 AM PDT The Composite index fell to 55.4 from 57.8 and below the expectations of 57.3.  Overall the PMI data was weaker with Germany also showing lower than expected falls with PMI Manufacturing down to 58.2 from 62 (expected 61) and PMI services coming in at 54.9 from 56.8 (expected 57.0).

German man. PMI 58.2, serv. was 54.9 Posted: 23 May 2011 12:29 AM PDT

German data at 3:30 Posted: 23 May 2011 12:27 AM PDT

EUR$ completes full hourly retracement Posted: 23 May 2011 12:24 AM PDT The USD opened the weak firmer from weekend trading; 20 points firmer against the Euro. Since the open the pair has traded continually lower and completed the full retracement from the low of 1.40475 on the 16th to Friday’s high of 1.43446. Since reaching a low of 1.40204 following a poor French manufacturing number, the pair has rebounded slightly.

ECB’s Nowotny Posted: 23 May 2011 12:12 AM PDT Shouldn’t only look at “problematic” countries. Germany is particularly encouraging. Risks of L or W shaped recovery have decreased. Better global outlook could reinforce Europe. Countries didn’t manage budgets in good times. reasonable, balanced reform package is needed. More emphasis on anti-cyclical policies.

ECB’s Weidmann Posted: 23 May 2011 12:06 AM PDT Sees need to separate fiscal and monetary policy. German economic recovery is “remarkable”. German economy in “good shape”. Upswing is “broad based”. Euro consumer price show ’significant” jump. Need to closely monitor risk of 2ns round effects. Need to take gain in long term inflation expectations seriously. Inflation expectations show signs of worsening price outlook. ECB monetary policy remains “expansionary”. Must exit as soon as financial markets recover.

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Forex Market Updates & Commentary

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• The Forex Week Ahead from FXDD
• The EURUSD is getting hit at the end of the NY day
• CFTC Commitment of Traders weekly report
• Next weeks Forex webinars
• Forex Wrap up Friday Rebroadcast May 20 2011
• Greece says the Fitch downgrade ignores additional fiscal measures
• France’s Largarde says Greece is in danger of default
• This is the level that the EURUSD should hold
• Fitch downgrades Greece to B+. EURUSD extends move lower
• Respect the move until proven otherwise

The Forex Week Ahead from FXDD Posted: 20 May 2011 02:02 PM PDT CLICK HERE FOR THE PDF REPORT

The EURUSD is getting hit at the end of the NY day Posted: 20 May 2011 12:56 PM PDT The position squaring has forced the EURUSD down quite sharply in the last hour of trading. There is no new news to support the move.  A close below the 1.4150 level which represents the 38.2% of the 2011 low to high range would not look good from a technical perspective.

CFTC Commitment of Traders weekly report Posted: 20 May 2011 12:33 PM PDT Net Long Japanese Yen: 15,373   vs 13,054 last week  (Weaker US$ raised) Net Long Euro:41,645 vs   61,447 last week    (Weaker US$ trimmed) Net Long Australian Dollar: 50,919 vs   60,321  last week    (Weaker US$ trimmed) Net Long Swiss Franc:15,661  vs  16,336   last week    (Weaker US$ trimmed) Net Long Canadian Dollar: 26,291 vs   37,203   last week   (Weaker US$ trimmed) Net Short British Pound: -928    18,118  last week    (Stronger US$ trimmed) Net Long Mexican Peso:104,912   118,065   last week    (Weaker US$ trimmed) Net Long New Zealand Dollar: 12,624    13,714   last week   (Weaker US$ trimmed) This report is released each week and shows the net position of traders in the market. It is thought to be a counter indicator for the likely direction of the market although this may not pan out and positions change throughout the week. This is just a snap shot. As a example, the position in the JPY is long and the position got larger during the week.  (so the USDJPY position got more short during the last week of trading). If the assumption of the interpretation is true, the market is short USDJPY and this may lead to a short covering rally next week. The EURUSD position is net long EURUSD. However, compared to last week the position is less.  This week the EURUSD rallied higher so some profit was likely taken on the net position.

Next weeks Forex webinars Posted: 20 May 2011 11:56 AM PDT Next weeks Forex webinars - Please register for the ones you plan to attend. Monday - Week ahead in the Forex 9:30am with Greg, Bill and Shawn - Register - Forex Basics 4pm with Shawn and Jason - Register Tuesday  -The Traders Course Lesson 06 - 6 Attirbutes of Successful Traders - Register

Forex Wrap up Friday Rebroadcast May 20 2011 Posted: 20 May 2011 10:30 AM PDT Forex Wrap up Friday Watch the Rebroadcast

Greece says the Fitch downgrade ignores additional fiscal measures Posted: 20 May 2011 08:46 AM PDT They also say it is influenced by press.  The mud gets thrown back and forth.

France’s Largarde says Greece is in danger of default Posted: 20 May 2011 08:34 AM PDT She adds that Greece is too slow on privatization and any restructuring of Greek debt is out of the question.  She adds however, that a volutary restructuring of debt by banks would be acceptable. The question is will they want to restructure.

This is the level that the EURUSD should hold Posted: 20 May 2011 08:28 AM PDT In a trend move like we have seen from the NY high I want to see the legs of the trend, hold around the 38.2% retracement levels. Doing so, gives traders confidence that the “big players” believe in the move and supporting the move and want to see the trend continue. Earlier today, the price moved lower and corrected 38.2%. Now the same level is being tested at the 1.4184 area.  I would want to see that level hold and start another leg down, to keep the trend and bears fully in charge.

Fitch downgrades Greece to B+. EURUSD extends move lower Posted: 20 May 2011 07:34 AM PDT This continues to send the EURUSD lower.  The EURUSD’s next target is 1.4121. Below that the 1.4095 is the underside of an old trendline on the hourly chart below. The low for the week was on Monday at the 1.4047 level.   Is it out of the question? The steps lower will decide.  On the topside now, the 1.4186 level is the 38.2% of the last leg to the downside.  Earlier in the day the price held the 38.2% of the move up from the initial low.  This was a clue that the bias remained bearish.  Traders should  respect the move as the technical picture deteriorated.  A move above the 38.2% on the 5 minute chart takes the pressure off, but the bulls have the burden of proof now. Looking at the daily chart a move and close below the 1.4150 level (38.2% of the 2011 range) will give the market a sour taste into the weekend and new week.

Respect the move until proven otherwise Posted: 20 May 2011 07:30 AM PDT Just when I thought the market was done, there was a comment that Norway would stop an aid payment to Norway and suddenly the price started to fall with more momentum.  The price move lower has broken through the floor over the last few days at the 1.4196-1.4205 area and this move has to be respected. Unless the price is able to move back above these levels, the bias is to the downside.

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Forex Market Updates & Commentary

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• GBPUSD tests trendline support
• EURUSD breaks to the three day low
• ECB Weidman making some comments
• Norway stops aid payment to Greece
• No follow through in the EURUSD
• Silver moves toward 200 hour MA resistance again
• EURUSD back in the range as market back consolidating
• Canada Retail Sales Drop
• Canada retails sales sends USDCAD higher
• Saudi Prince Al Waleed says Saudi objective is oil between $70-$80 per barrel
• The NY Opening Forex Call for May 20th 2011
• Canada Retail Sales Due at 8:30AM
• ECB Noyer say general monetary policy principals have not changed
• Canadian CPI weaker than expected
• Germany’s Bundesbank; German growth likely to ease, Q1 growth overstates momentum of recovery

GBPUSD tests trendline support Posted: 20 May 2011 07:14 AM PDT

EURUSD breaks to the three day low Posted: 20 May 2011 06:58 AM PDT The EURUSD has quickly extended to new lows (just when the things were looking done for the week). There has not been mush objection to the move with the next target being the 1.4161 level now.

ECB Weidman making some comments Posted: 20 May 2011 06:50 AM PDT Emergency tool exit is a question of when not if Reprofiled debt impossible for ECB to accept as Greek banks would be cut off from funding Reprofiling implies ECB aid without collaterol Govt must not blur monetary policy with fiscal duties.

Norway stops aid payment to Greece Posted: 20 May 2011 06:46 AM PDT This has led to some Euro weakness.

No follow through in the EURUSD Posted: 20 May 2011 06:30 AM PDT I thought the EURUSD would have pushed above the 1.4250 level and this would open the way for a further move to the upside. The price did try higher but that move stalled before the 38.2% of the days range and the market traders quickly showed their colors by quickly selling the market off.  NO Conviction.  The move back below 1.4250 muddies the water and makes me feel this Friday - with no US data scheduled and London looking to close - could be a tricky one. 100 hour MA is at 1.4236.

Silver moves toward 200 hour MA resistance again Posted: 20 May 2011 06:18 AM PDT Silver is approaching resistance against the 200 hour MA. The price over the last few days has used the 200 hour MA on the topside and 100 hour MA on the downside more or less. Sure there were some attempts to move above the 200 hour MA, but each attempt, did not solicit large upside momentum.  So respect the levels until the break is more meaningful.  The higher margin and the sharp fall from the $50 level seems to have have quieted the speculative flows.

EURUSD back in the range as market back consolidating Posted: 20 May 2011 05:58 AM PDT The EURUSD is back within the “meat of the weeks” range between the 1.4200 area on the downside, and the 1.4287-1.4305 on the topside. The price in the NY session went to a low of 1.4210 and has since bounced higher. Th 1.4250 is the underside of the trendline and also near the 200 hour MA. A move above will put the focus back on the 1.4287 level above.  I would expect sellers against that level as the market continues to struggle with direction.

Canada Retail Sales Drop Posted: 20 May 2011 05:32 AM PDT Canada retail sales come in weaker at 0.0% opposed to the survey of 0.9%. The revision of the prior 0.4% figure comes in a touch higher at 0.5%. Retail sales less autos also witha  weak number moving to -0.1% from 0.7%. USD/CAD trading higher on the news.

Canada retails sales sends USDCAD higher Posted: 20 May 2011 05:31 AM PDT The retail sales are much weaker. This coupled with the weak CPI  released earlier today, has sent the USDCAD higher with the price now above the 100 hour MA at the 0.9711 level (blue line in the chart above).  On the daily chart below, the price held the underside of an old, important trendline and this also gives bulls more confidence.  Typically higher oil leads to a higher CAD. Oil is off it’s highs - back below the $100 a barrel and weaker data, it takes pressure of BOC officials on rates.

Saudi Prince Al Waleed says Saudi objective is oil between $70-$80 per barrel Posted: 20 May 2011 05:12 AM PDT He feels the move higher in oil is psychological. He points out that the Saudi slowing of supply is proof of it. They restrict supply and the price came down. The prince is on CNBC in the US and his comments are general in nature about his thoughts on the US economy.

The NY Opening Forex Call for May 20th 2011 Posted: 20 May 2011 05:03 AM PDT

Canada Retail Sales Due at 8:30AM Posted: 20 May 2011 04:49 AM PDT

ECB Noyer say general monetary policy principals have not changed Posted: 20 May 2011 04:35 AM PDT Monetary analysis helps to identify long term price risk Inflation expectations are firmly anchored Meanwhile ECB Mersh says: We are not funding any national economies in a comment directed toward Greece of course.

Canadian CPI weaker than expected Posted: 20 May 2011 04:01 AM PDT Monthly came in at 0.3% versus the 0.5% expected, and core monthly CPI was 0.2%. The CAD sold midly on the release.

Germany’s Bundesbank; German growth likely to ease, Q1 growth overstates momentum of recovery Posted: 20 May 2011 03:07 AM PDT *Euro area economic recovery gained momentum; global economy remains favorable *monetary policy still extremely expansionary *domestic demand will take off shortly *banks reduced liquidity appreciably *German Q1 growth overstates momentum considerably *German growth likely to ease somewhat

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