Forex Market Updates & Commentary

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• Fitch, S&P and Moody’s reaffirms Germany’s AAA rating
• New week lows for the EURUSD
• EURUSD makes a break to the downside
• IMF Spokesman:Greece has not requested a new IMF loan program.
• German stocks sell sharply lower
• Berkshire Hathoway to invest 5 billion in Bank of America
• US think tank says SNB to take more drastic measures with regard to its currency strength
• Better jobless claims. Now what?
• Jobless Claims Rise Again, Continuing Claims Improve
• Webinars Today at 9:30 AM and 4:00 PM. Register here
• Will Jobless Claims Fall Below 400K Today?
• NY Morning Forex Commentary for August 25th 2011
• BOE Weale comments from speech in Doncaster
• UK CBI reported sales (m/m) -14 vs. -10 expected.
• Pimco’s Gomez says Bernanke will not announce a fresh round of QE tomorrow.

Fitch, S&P and Moody’s reaffirms Germany’s AAA rating Posted: 25 Aug 2011 07:54 AM PDT The rumor of a downgrade which were in the market and may have contributed to the sharp fall in the German DAX index.  The EURUSD remains below the 1.4346 low which was the low for the week before todays break lower.

New week lows for the EURUSD Posted: 25 Aug 2011 07:49 AM PDT The narrow 153 pip range for the EURUSD has been extended below the 1.4346 low fom Monday.  The price is also now below the 100 day MA at the 1.4364 level today.  The next key target will be the 1.4260-68  area. This is the 38.2% of the move up from the July low it also was the low from last week.

EURUSD makes a break to the downside Posted: 25 Aug 2011 07:49 AM PDT The EURUSD has taken an early break to the downside on the back of German concerns, and Greek concerns (not requesting new loan program).  The price is now down testing the low for the week at the 1.4346 level.  The range for the week has been a narrow 153 pips which is very narrow.  The expectation would be for an extension of that range before the end of the week (if not the next hour). The topside resistance now comes in at the 1.4372 level where the trendline was broken.

IMF Spokesman:Greece has not requested a new IMF loan program. Posted: 25 Aug 2011 07:32 AM PDT IMF_EU distribution of financial support for Greece not set in stone. This is curious news and makes you wonder “why not?”  The EURUSD is moving lower on the report.

German stocks sell sharply lower Posted: 25 Aug 2011 07:22 AM PDT German stocks under pressure on the back of a rumored short selling ban.    In other German news the finance minister says EFSF in current size will be sufficient.  Also the ruling party may delay a rescue vote until September 29th from September 23rd .

Berkshire Hathoway to invest 5 billion in Bank of America Posted: 25 Aug 2011 06:12 AM PDT The announcement sent the risk pairs back higher.  Shares of Bof A are up $1.50.  The EURUSD surged higher intially. Came back down and is now back above the 1.4433 level.  The topside resistance is at the 1.446 level where trendline resistance is found.  A move above targets the high for the week at 1.4499.

US think tank says SNB to take more drastic measures with regard to its currency strength Posted: 25 Aug 2011 05:42 AM PDT This has sent the USDCHF and EURCHF higher

Better jobless claims. Now what? Posted: 25 Aug 2011 05:41 AM PDT I know it is early in the day, and it is August 25th and Bernanke’s long awaited speech at Jackson Hole is tomorrow, but I heard a market voice in my head say “Jobless claims better. Now what?” The EURUSD intially moved higher on the thought that good news is good news for risk and that seems to include the EURO now, but after testing the midpoint of the days rand at the 1.4431, the price has moved back lower as good news may mean no QE3 tomorrow which is not good for the stocks, which is therefore bad for the risk (which seems to include the EURO). For the week, the EURUSD has a low of 1.4346 and a high of 1.4499. The 153 pips range is a very narrow low to high trading range. This suggests that if not today, tomorrow will have an extension of the range. So what should trader’s look for? Clearly, over the last few days some battle lines have been drawn. On the downside, the 100 hour MA and the 200 hour MA are near each other at the 1.4402 and the 1.4395 levels respectively. The last few days has seen the price test the level a number of times and each time the price has bounced (see chart above). A move through these levels puts the bears in charge for a test of the weeks lows – if the price can stay below these levels. On the topside, A trendline off the highs on the hourly chart show resistance at 1.4467 currently. If the price can breach this level, the bulls should take control and force the pair higher.

Jobless Claims Rise Again, Continuing Claims Improve Posted: 25 Aug 2011 05:33 AM PDT Jobless Claims:  Survey: 405K  Actual: 417K  Prior: 408K  Revised: 412K   Week Ending 8/20 vs 8/13 Change: 5,000 vs 13,000 Percent Change: 1.2% vs 3.3% 4-Week Moving Avg: 407,500 vs 403,500   Continuing Claims:  Survey: 3700K  Actual: 3641K  Prior: 3702K  Revisad: 3721K

Webinars Today at 9:30 AM and 4:00 PM. Register here Posted: 25 Aug 2011 05:05 AM PDT Charting the Majors FREE Webinar at 9:30 AM EST.  Join us by CLICKING HERE TO REGISTER ———————————————————————————————————————————— The Traders Course with Greg Michalowski will focus on the Canadian Dollar and those things that influence the moves in the currency.  This is a continuation of the summer series that has been looking at the different countries and their currencies. CLICK HERE TO REGISTER.

Will Jobless Claims Fall Below 400K Today? Posted: 25 Aug 2011 04:59 AM PDT

NY Morning Forex Commentary for August 25th 2011 Posted: 25 Aug 2011 04:56 AM PDT

BOE Weale comments from speech in Doncaster Posted: 25 Aug 2011 04:32 AM PDT Face contagion from EU and US…Cause for concern Banks are better capitalized and can face risks There is downside inflation risk. Lessens the need for rate increase Oil Prices drop is silver lining for the economy BOE has tools for further stimulus if needed Could buy long dated bonds but do not need see need for bond buying

UK CBI reported sales (m/m) -14 vs. -10 expected. Posted: 25 Aug 2011 03:06 AM PDT

Pimco’s Gomez says Bernanke will not announce a fresh round of QE tomorrow. Posted: 25 Aug 2011 03:01 AM PDT

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Forex Market Updates & Commentary

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• GBPUSD tests channel support
• USDJPY moves higher
• EURUSD stays true to the US range
• Bernanke to assure the markets the Fed has tools
• Belgium Business Confidence fell -7.8 vs -3.5 expectations. Lowest since December 2009
• USDJPY not impressed by the Durables data
• Better US data. EURUSD moves higher
• Durable Goods Improve Over 6% From Prior
• EURUSD found support against the days midpoint
• The NY Morning Forex Commentary is available for viewing
• US Durable Goods Orders Data Due at 8:30AM
• US MBA mortgage applications -2.4% vs. 4.1% prior.
• EUR/USD bullish hourly trendline support, testing 23.6% on hourly
• Kiwi receiving resistance from the 200 hr moving average
• Euro zone industrial new orders (m/m) -0.7%; worse than the 0.6% forecast and 3.6% prior reading.

GBPUSD tests channel support Posted: 24 Aug 2011 08:05 AM PDT The GBPUSD fell below the 200 hour MA and lows from August 19the and 22nd and fell further (see hourly chart above). The price is now down testing the channel trendline at the 1.6385 area. Profit takers came in on the first test.  Will they on the second attempt.  ON the topside, this train to the downside would continue if the price is now able to stay below the 1.6413 level. This level corresponds with the orginal low for the day and is now the 38.2% of the last leg to the downside.

USDJPY moves higher Posted: 24 Aug 2011 07:56 AM PDT The USDJPY has pushed above the 76.62-67 area. This turns the bias back higher for the pair.  76.925, 77.00  and 77.21 are the next upside targets for the pair.

EURUSD stays true to the US range Posted: 24 Aug 2011 06:55 AM PDT The high is defined at the 1.4476 area. The low is defined against the 1.4426 level (50% retracement 200 bar MA in the chart below).  Traders frustrated.  A break will be eyed. Failure will be on the mind of the traders.

Bernanke to assure the markets the Fed has tools Posted: 24 Aug 2011 06:30 AM PDT There is a rumor in the market that a “Think Tank” report is saying that Fed’s Bernanke will look to assure the market that the Fed has the tools to fight a downturn in the US economy. The options that the Fed has include: 1. QE3.  The Fed has tried QE1 and QE 2. When does the tries stop. The last time QE2 one can perhaps argue the excess funds led to speculative buying of commodities, oil and stocks.   This led to slower spending, lower confidence and now lower stocks.  2.  Reinvest maturing proceeds further out the curve.  The Fed is taking the maturing proceeds from the issues they hold on their balance sheet and buying mainly shorter term assets.  The Fed could focus the buying to the longer end of the yield curve which would help to keep mortgage rates low.  The downside is the Fed’s balance sheet has the potential to remain large for a long time and do lower mortgage rates help the home buyer who is upside down on his mortgage.  3. Lower the reserve requirement that banks have to hold.  If the banks have to hold less, they can lend more.  The banks might just buy bonds instead of lending.  This keeps rates low but does it get the economy going? The Fed has some tools but what impact will those tools have on the economy?

Belgium Business Confidence fell -7.8 vs -3.5 expectations. Lowest since December 2009 Posted: 24 Aug 2011 06:01 AM PDT Last month came in at -2.5. This is the lowest level since December 2009. Earlier today the German IFO indices also came out weaker for August.  The EURUSD has rotated off the highs after taking out the days highs by a pip.

USDJPY not impressed by the Durables data Posted: 24 Aug 2011 05:54 AM PDT The better US Durable Goods Orders was met with a yawn in the USDJPY. The price barely moved and remains below the 100 and 200 hour MAs at hte 76.63 and 76.67 levels respectively. Support at the 76.43 level remains.  Overnight Moody’s downgraded the debt of Japan and a 100 billion yen support package failed to weaken the Yen. Now stronger data in the US gets no dollar buying.  Will need a move above the 76.63-67 area to get any attention.

Better US data. EURUSD moves higher Posted: 24 Aug 2011 05:37 AM PDT Durable Goods came in much better than expected (revisions also moved higher). This has led to higher EURUSD on the ironic risk on trade. The EURUSD is approaching the highs of the day at 1.4474.  The high from yesterday extended to 1.4499.  Traders will be eyeing these levels for resistance.  The hourly chart show that the high area today was also a high area from August 15th and August 16th. Each time the price moved to these levels, the price came off.  There have been two attempts to push above with each lasting  a few hours before failing and moving back down. Be on the lookout for failed breaks as well.   These up and down days lend themselves to the false breakout.  Be aware     The data should help the stocks today but it is a long day ahead.

Durable Goods Improve Over 6% From Prior Posted: 24 Aug 2011 05:32 AM PDT Durable Goods Orders:   Survey: 2.0%    Actual: 4.0%    Prior: -2.1%   Revised:  -1.3%   Durables Ex Transportation:   Survey: -0.5%   Actual:  0.7%   Prior: 0.1%   Revised:  0.6% Cap Goods Orders Nondef Ex Air:   Survey:  -1.6%     Actual:  -1.5%    Prior:  -0.4%     Revised: 0.6% Cap Goods Ship Nondef Ex Air:    Actual:  0.2%    Prior:  1.0%  Revised: 1.9%

EURUSD found support against the days midpoint Posted: 24 Aug 2011 05:29 AM PDT The EURUSD fell in early NY trade, but has found profit taking support against the 100 and 200 bar MA on the 5 minute chart and the days midpoint. These levels will be watched as support through the Durable Goods numbers at 8:30 AM ET.

The NY Morning Forex Commentary is available for viewing Posted: 24 Aug 2011 05:05 AM PDT

US Durable Goods Orders Data Due at 8:30AM Posted: 24 Aug 2011 04:41 AM PDT

US MBA mortgage applications -2.4% vs. 4.1% prior. Posted: 24 Aug 2011 04:09 AM PDT

EUR/USD bullish hourly trendline support, testing 23.6% on hourly Posted: 24 Aug 2011 02:49 AM PDT We seen recent buying in the euro following some selling after worse than expected German Ifo and Euro zone industrial new orders readings. Seen on the hourly chart, the pair once against tested upward trendline support and tested the 23.6% on the move from Monday’s low to yesterday’s high. Continued strength in the euro should see us test the 1.4500 handle again, but a turnaround sees us back towards 1.44229. We may not see a chosen direction until the entrance of New York into the market.

Kiwi receiving resistance from the 200 hr moving average Posted: 24 Aug 2011 02:38 AM PDT The NZD/USD has been receiving resistance from the 200 hr moving average for the last 7 hours, and has barely been able to poke its head higher through the line; the 200 hr currently comes in at .82919. Continued resistance should see the pair trade lower, in which case we look to the 50.0% retracement line on the move from Monday’s low to yesterday’s high. In the case of a push higher we look to .8316.

Euro zone industrial new orders (m/m) -0.7%; worse than the 0.6% forecast and 3.6% prior reading. Posted: 24 Aug 2011 02:03 AM PDT

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Forex Market Updates & Commentary

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• Rumor that shorting ban on US stocks closer
• Austerity in Italy causing labor unrest. Union calling general strike on 6th of September
• Richmond Fed Falls, US New Home Sales Dip Under 300K
• FDIC report lending grows for the 1st time in 3 years
• Greenspan comments
• Finnish PM says will drop out of Greece bailout if collateral deal denied
• EURUSD continues fall and tests 1.4400 area
• Greenspan saying Euro breakdown creating difficulties. EURUSD moves lower
• Finland PM demands collateral from Greece
• EURUSD finds support against intraday technical levels
• The USDCAD stays below shorter term 100 bar MA at 0.9870
• Canada Retail Sales Stay According To Forecast
• NY Morning Forex Commentary for August 23rd 2011
• Goldmans O’Neil says Fed won’t be in a rush to do further easing
• Canada Retail Sales Data Due at 8:30AM

Rumor that shorting ban on US stocks closer Posted: 23 Aug 2011 07:18 AM PDT

Austerity in Italy causing labor unrest. Union calling general strike on 6th of September Posted: 23 Aug 2011 07:16 AM PDT

Richmond Fed Falls, US New Home Sales Dip Under 300K Posted: 23 Aug 2011 07:01 AM PDT New Home Sales:   Survey: 310k   Actual: 298K   Prior:312K  Revised:  300K June vs May  2011 Total Sold:  27k vs 28k Not Started: 8k vs 6k Under Construction: 9k vs 10k Complete:  11k vs 13k New Home Sales(MoM):  Survey: -0.6%   Actual: -0.7%   Prior: -1.0%  Revised:  -2.9% Richmond Fed Manf. Index:      Survey:  -5   Actual: -10    Prior:  -1

FDIC report lending grows for the 1st time in 3 years Posted: 23 Aug 2011 07:01 AM PDT Problem bank list falls for the 1st time since 2006 Non current loans declined 6.5% in 2nd quarter Loan loss provisions declined 53.%

Greenspan comments Posted: 23 Aug 2011 07:00 AM PDT Gold Buyer think inflation inevitable. Does not see a bubble Baby Boomers better educated than the young Stock trading technology helps when profitable High uncertainty causing high employment Something has to give in Europe Southern Europe countries different from North

Finnish PM says will drop out of Greece bailout if collateral deal denied Posted: 23 Aug 2011 06:52 AM PDT This is also pressuring the EURUSD now and forced the EURUSD to the 1.4383 100 hour MA level.

EURUSD continues fall and tests 1.4400 area Posted: 23 Aug 2011 06:43 AM PDT The EURUSD has continued the slide to the downside – falling to the 1.4400 level. The 1.4403 level, 1.4390 and the 1.4384 (100 hour MA – blue line in the chart above) are the next targets in the quick reversal move. On the topside, the 1.4409 level and 1.4426 (midpoint of the days range) are now upside resistance levels for the pair.

Greenspan saying Euro breakdown creating difficulties. EURUSD moves lower Posted: 23 Aug 2011 06:25 AM PDT The EURUSD has moved lower and broke below the support outlined in the previous post against the 1.4438-43 area. The 1.4426 and 1.4409  levels are the next targets for the pair.

Finland PM demands collateral from Greece Posted: 23 Aug 2011 06:12 AM PDT Adds the collateral deal must not delay bailout package

EURUSD finds support against intraday technical levels Posted: 23 Aug 2011 06:04 AM PDT The 1.4438 to 1.4443 area has a number of intraday support levels to lean against and the EURUSD on the first look in the NY session found that support.  The activity – in  NY at least – has been to the downside after the sharp move higher on the back of the better than expected PMI data in Germany and the EU as a whole.  The German ZEW Investor Sentiment was worse than expected and this took some of the steam out of the market.. Traders will likely give the benefit of the doubt to the support level (1.4438-43) until broken.  If broken the 1.4426 and then 1.4409 become the downside targets for the pair. On the topside the 1.4470 level (high from August 16th is the next upside target). The high last week came in at 1.4516.

The USDCAD stays below shorter term 100 bar MA at 0.9870 Posted: 23 Aug 2011 05:36 AM PDT The USDCAD is finding resistance in the early NY hours below the 100 bar MA on the 5 minute chart. That level comes in at the 0.9870 level.  The 100 and 200 hour MA on the hourly chart come in at 0.9862 and 0.9866 respectively.  The midpoint of the last 8 days of trading comes in at the 0.9855.

Canada Retail Sales Stay According To Forecast Posted: 23 Aug 2011 05:31 AM PDT Canada Retail Sales:  Survey: 0.7%  Actual:  0.7%   Prior:  0.1%   Revised: 0.3% Canada Retail Sales Less Autos:  Survey: 0.1%  Actual:  -0.1%   Prior:  0.5%   Revised: 0.6% USD/CAD trading lower on the news.

NY Morning Forex Commentary for August 23rd 2011 Posted: 23 Aug 2011 05:15 AM PDT

Goldmans O’Neil says Fed won’t be in a rush to do further easing Posted: 23 Aug 2011 04:12 AM PDT

Canada Retail Sales Data Due at 8:30AM Posted: 23 Aug 2011 04:11 AM PDT

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Forex Market Updates & Commentary

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• Mexico Retail Sales Improve to 4.8%
• BOE Broadbent says UK outlook has softened
• Mexican Retail Sales Due at 9AM
• Chicago Fed National Activity Index Improves
• Moody’s placed Japan’s Aa2 rating on downgrade review May 31st
• The NY Morning Forex Commentary for August 22nd 2011
• Chicago Fed Activity Data Due at 8:30AM
• Moody’s comments on Greece
• Euro firmer in recent trade
• Deutsche Bank cuts 2012 Eurozone GDP forecast to 0.8% from 1.5%.
• German fin. minister says economic growth will slow down for the rest of 2011.
• S&P’s Beers says Greece to default on debt by end of this year.
• 8-22 Calender
• Noda on the wires…..

Mexico Retail Sales Improve to 4.8% Posted: 22 Aug 2011 06:06 AM PDT

BOE Broadbent says UK outlook has softened Posted: 22 Aug 2011 05:41 AM PDT Productivity growth has been weak Low rates reflection of weak growth Significant spare capacity Current policy appropriate Outlook for growth weakened in 3-4 mos. Bank strains persisted longer than expected He is in the middle of MPC debate The GBPUSD corrected 38.2% of the Friday range in the early NY session and is now down testing support against the 100 and 200 bar MA on the 5 minute chart. A move below the 1.6483 level would target the lows from Friday/today at the 1.6461-65 area

Mexican Retail Sales Due at 9AM Posted: 22 Aug 2011 05:39 AM PDT

Chicago Fed National Activity Index Improves Posted: 22 Aug 2011 05:36 AM PDT

Moody’s placed Japan’s Aa2 rating on downgrade review May 31st Posted: 22 Aug 2011 05:22 AM PDT According to Moody’s the firm choose to extend that time frame but has apparently not made any change to the downside as of yet. The news is having little impact.

The NY Morning Forex Commentary for August 22nd 2011 Posted: 22 Aug 2011 05:11 AM PDT

Chicago Fed Activity Data Due at 8:30AM Posted: 22 Aug 2011 03:59 AM PDT

Moody’s comments on Greece Posted: 22 Aug 2011 02:31 AM PDT Bilateral agreements on collateral would be credit negative for Greece and other bailout countries. Pursuit of such agreements could delay next tranche of aid for Greece and so precipitate payment default. Finnish-Greek accord raises concerns about will, ability of some Euro policy makers to take steps needed to safeguard the euro.

Euro firmer in recent trade Posted: 22 Aug 2011 01:37 AM PDT With a lack of economic releases tonight we’ve seen a pretty calm market with euro trading on session highs as European equities currently post gains. We saw a 50 point run up in the EUR/USD on the last hourly candlestick with the pair currently testing the 23.6% retracement line on the move from Friday’s low to the high of 1.44517. If the euro continues to strengthen, we look to 1.44517 as our next target; resistance found in this area could bring us back towards 1.43778.

Deutsche Bank cuts 2012 Eurozone GDP forecast to 0.8% from 1.5%. Posted: 22 Aug 2011 12:46 AM PDT Adds that the ECB will likely remain on hold at 1.5% until 2013.

German fin. minister says economic growth will slow down for the rest of 2011. Posted: 21 Aug 2011 11:06 PM PDT

S&P’s Beers says Greece to default on debt by end of this year. Posted: 21 Aug 2011 10:47 PM PDT

8-22 Calender Posted: 21 Aug 2011 10:31 PM PDT

Noda on the wires….. Posted: 21 Aug 2011 10:30 PM PDT Not ruling out any options to address strong yen. Japan will take bold action if needed. JPY moves have been one sided.

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Forex Market Updates & Commentary

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• The FXDD Forex Webinar Education Series: Register this weekend.
• The Week Ahead in Trading this Monday (August 22nd) at 9:30 AM
• NZDUSD moves toward key 100 day MA and Fibo Retracement level.
• FT article talking about the funding issues that European banks are having
• USDCHF moves above intraday resistance. Dollar better bid
• Weekly Forex wrap up show – Rebroadcast
• BOJ considers possible additional easing – Sankei report
• EURUSD bulls and bears fighting it out now.
• ECB Stark says bond purchases are temporary to buy time
• EURUSD back down testing the 100 hour MA/ 38.2% of the days range
• NZDUSD tests resistance and comes back off
• GBPUSD steps higher. Eyes topside trendline resistance
• USDJPY breaks through all time lows and stops triggered

The FXDD Forex Webinar Education Series: Register this weekend. Posted: 19 Aug 2011 01:11 PM PDT Get a head start this weekend by registering for the FREE FXDD Webinar series.  Below is a listing of the webinars that are available.    ——————————————————————————————————————————- 1.  Shawn Powell returns on Monday with his Forex Basics webinar on Monday at 4 PM EST.  Come and listen as Shawn takes attendees through the basics that will get the new trader moving forward in the forex market. ——————————————————————————————————————————- 2.  On Tuesday, James Chen will conduct his “Talking Technicals” webinar at 12:30 PM EST. Come in and hear the current technical views of FXDD’s Charterd Market Technician and Director of Technical Research and Education ——————————————————————————————————————————- 3.  At 4 PM on Tuesday, Greg Michalowski, Chief Currency Analyst will continue in his Traders Course series that is focused on looking at the individual currencies and what makes them tic.  On Tuesday he will outline the ins and outs of trading the Australian Dollar.  ——————————————————————————————————————————- 4.  On Wednesday, James Chen is back with his “Ask the Chartist” webinar.  It is your time to get your questions in and drive the show.   The webinar will be held at 10:00 AM EST.  ——————————————————————————————————————————-

The Week Ahead in Trading this Monday (August 22nd) at 9:30 AM Posted: 19 Aug 2011 12:53 PM PDT Week Ahead in Trading this Monday at 9:30 AM-  CLICK HERE TO REGISTER

NZDUSD moves toward key 100 day MA and Fibo Retracement level. Posted: 19 Aug 2011 12:31 PM PDT In an earlier post, I warned of a move below the 100 bar MA and the 50% retracement. The price looked to hold against these key intraday levels (see chart above), but succumbed to the downside. The price is now down testing the 100 day MA and the 38.2% retracement of the move up from the March 2011 low. Those levels come in at the 0.8182 and 0.8156 levels respectively. The low has reached 0.8170 level – at the lows for the day and week.  Not a good ending for the risk currency pair.

FT article talking about the funding issues that European banks are having Posted: 19 Aug 2011 12:24 PM PDT http://www.ft.com/intl/cms/s/0/e285f5ce-ca67-11e0-a0dc-00144feabdc0.html?ftcamp=rss#axzz1VVIi2xST Banks need to fund themselves in the interbank market. When the risk of default rises, those banks have trouble securing funding. They may also tap the commercial paper market and that may dry up.  Cash is king in times of trouble and if banks horde capital, the funding will have to come from the central bank(s).  The article does note that it is not as dire as the Lehman days but the tide is turning for the worst.

USDCHF moves above intraday resistance. Dollar better bid Posted: 19 Aug 2011 11:19 AM PDT The USDCHF has moved above the 100 bar MA after two tests found sellers (see chart above).  The pair might be getting cold feet as the weekend approaches and threat of action from the SNB is a possibility.   It may just be Friday afternoon flows. What we have seen, however, is a reversal from the dollar selling. The USDJPY has moved back above the 76.30 level (helped by reports of BOJ threats). The EURUSD is wandering above and below the 100 hour MA (but does remain above the 38.2% of the days range at 1.43796 (see chart below). The GBPUSD is well off the highs and looks toward support against the 100 hour MA and trendline at the 1.6465 level. It is Friday. The week is coming to a close so anything can happen. What I warn is that the level of risk over the weekend is “Red Alert”.  The BOJ is in play. The SNB is in play.  The Fed has the potential to start leaking some ideas.  Jackson Hole will be awaited next week and it is likely they hold out. Plus a fight for the weakest currency is starting to take hold.  IF the US wants to continue to pursue a weak currency, what about the JPY and the CHF?  They want one too!  Does the UK want GBPUSD above 1.6600.  Trichet and the inflation hawks of the ECB always want a strong EURO but is it good for their economies in this time of austerity tightening, credit tightening, and global slowdown.  So be sure to account for the increased risk.  My mission is to make the most amount of money with the least amount of risk.  Risk is increased.

Weekly Forex wrap up show – Rebroadcast Posted: 19 Aug 2011 11:16 AM PDT Weekly Forex wrap up show this Friday at 12:30 PM. Greg Michalowski teaches the class this week. Watch the Rebroadcast

BOJ considers possible additional easing – Sankei report Posted: 19 Aug 2011 10:22 AM PDT

EURUSD bulls and bears fighting it out now. Posted: 19 Aug 2011 09:08 AM PDT The trend higher today took the price to the highs from yesterday’s trade and has come back off. The move lower corrected 38.2% of the days range and the move back higher resumed. Now the price is testing the 38.2% of the move down.   Key level for the pair as the week comes to a close.  We could see the market continue back higher or move back to the support at the 1.4378 just as easily.

ECB Stark says bond purchases are temporary to buy time Posted: 19 Aug 2011 08:58 AM PDT Not central banks job to lower rates for debt ECB intervenes because mkts don’t function Unresponsible to call ECB a Bad Bank (who did?) ECB hasnt taken on as big a risk as other Central banks (ie. the Fed?) Only providing liquidity to healthy banks Banks mistrust not as bad as after Lehman Inflation risk low as long as economy is subdued Potential for inflation if growth picks up All developed economies have pub finance problems

EURUSD back down testing the 100 hour MA/ 38.2% of the days range Posted: 19 Aug 2011 08:32 AM PDT The EURUSD has rotated back lower after reaching the target resistance (see prior post) at the 1.4450 level (high reached 1.4451).  The price is now back down at the 1.4387-91 area where the midpoint of the week and the 100 hour MA is found.  That level started the rally higher.  Will it now hold support? If the level gives way, additional support at the 1.4378 will be eyed.  This is the 38.2% of the days trading range.  A break of the 1.4378 takes a lot of wind out of the sails. Holding opens the market to a rotation back higher. It is likely however, that the high is in place and the afternoon will be more range bound.

NZDUSD tests resistance and comes back off Posted: 19 Aug 2011 08:14 AM PDT The NZDUSD moved sharply higher with the dollar selling but ran into resistace against the 38.2% and the 200 hour moving average (green line in the chart above).  The move lower was quick , but the pair found support against the 100 bar MA and the 50% of the days trading range on the 5 minute chart (see chart below). Holding that level sent the price back higher but the rally stalled before the 200 hour MA at the 0.8283 level and a new move lower ensued. The up and down action on the NZDUSD is indicative of a more balanced market.  Staying below the 38.2% of the weeks high to low range (see chart above), has the bears feeling a bit better. A move below the 0.8237 level and then the 50% retracement at the 0.8231 will give them more confidence to the downside.

GBPUSD steps higher. Eyes topside trendline resistance Posted: 19 Aug 2011 07:42 AM PDT The GBPUSD held 100 hour MA and trendline support and with the dollar weakness today, the price has moved through topside target after target. The last level to get through was the 3 month high at the 1.6600 level.   The next key target is the 1.6630 level which is the parellel trendline resistance level.  I would expect sellers/profit takers against this level, with a break above triggering additional stops. On the downside look for support against the 38.2% (yellow line in the chart below) at the 1.6564 level.

USDJPY breaks through all time lows and stops triggered Posted: 19 Aug 2011 07:15 AM PDT The weight of the US dollar has pushed the USDJPY through the record low floor and stops have been triggered. There is no news that has prompted the fall that I can see.  There were little in the way of bids below old lows.  The price fell to a low of 75.93 and is now rebounding. The market will be watching the 76.20 level as close resistance and then the 76.28/30 area.  Stay below and the pressure remains from a technical perspective.  Move above and the move was likely stop driven. There is also talk that options triggers at 76.25 and 76.00 may have been a contributing factor.

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