Forex Market Updates & Commentary

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• EU Barroso says “EU Needs Growth Not Just Dicipline, Sanctions”
• US Exisiting Home Sales MoM Rise to 4.3%
• Ireland’s Junior Minister on the Floor of Parliament
• USDJPY trends higher
• EURUSD on the back burner today. Looking for an extension of the narrow range
• GBPUSD tests Fibo support.
• Greek Finance Minister confirms that the Bond swap will take place on March 12.
• US Existing Home Sales Data Due at 10AM EST
• GBPUSD falls to 100 day MA and Fibo Retracement support. USDJPY breaks above 80.00
• EU on the Wires
• The FXDD Morning Review
• Fitch downgrades Greek long term ratings to “C” from “CCC”.
• Eurozone Industrial New Orders (Dec) 1.9% vs. 0.5% expected.
• MPC Meeting Minutes
• Eurozone Flash Mfg. & Services PMI weaker than expected for February

EU Barroso says “EU Needs Growth Not Just Dicipline, Sanctions” Posted: 22 Feb 2012 07:01 AM PST EU Barroso says “EU Needs Growth Not Just Dicipline, Sanctions”

US Exisiting Home Sales MoM Rise to 4.3% Posted: 22 Feb 2012 07:01 AM PST US Exisiting Home Sales MoM Rise to 4.3% Existing Home Sales: Survey: 4.66M    Actual: 4.61M  Prior: 4.61M  Revised: 4.38% Existing Home Sales (MoM):  Survey:   1.1%   Actual:  4.3%   Prior:  5.0%   Revised: -0.5%

Ireland’s Junior Minister on the Floor of Parliament Posted: 22 Feb 2012 06:59 AM PST Ireland’s Junior Minister on the Floor of Parliament Massive write down of Anglo Debt would hurt confidence Anglo Irish mechanism needs to be redesigned Anglo Irish focus on interest rate maturity Not looking for significant write down of Anglo debt No Anglo Irish prom notes resolution in short-term

USDJPY trends higher Posted: 22 Feb 2012 06:59 AM PST The USDJPY has trended higher after consolidating into the close yesterday. The 100 and 200 bar MA on the 5 minute chart was going sideways and converging. The range was narrow adding to the non trending nature of the market. When the price started to move, momentum developed and the trend was on.  Looking at the 5 minute chart above, the price has moved steadily higher, using the 100 bar MA and trendlines on the 5 minute chart as support.  In the early NY session, the price extended above the high from August 2011 at the 80.23 level and targets the  50% of the move down from the 2011 high at 80.535 (see chart below). However, there is some slowing in the bullish move (see trendline break in the chart above).  The 100 bar MA will be eyed as support on an intraday basis. That level comes in at the 80.17 level . A move below this level would signal a slowing of the trend and perhaps further corrective pressure.  Until then, the buyers remain in control.

EURUSD on the back burner today. Looking for an extension of the narrow range Posted: 22 Feb 2012 06:33 AM PST The EURUSD is confined in a narrow trading range today (54 pips) as the GBPUSD and the USDJPY has taken center stage.  Discounting the Christmas week at the end of of December, the low to high trading range is one of the most narrow trading ranges in the EURUSD going back to September 2010 (April 22nd there was a range of 55 pips, in September 2010, there was a day with a 54 pip trading  range).  The expectation would be for an extension of the range.  The average range over the last 20 trading days has been 134 pips. I would not expect the market to reach that range, but there still is room for some sort of extension. The 5 minute chart below has trend line support at 1.3214 and topside resistance at the 1.3256 level.  The midpoint of the days range is 1.3237.  Yesterday’s close came in at 1.3234.  The market may look to these in-between values as clues for bullish and bearish bias.  Price below = bearish. Price above = bullish. In a narrow range, risk can be limited. What you hope for is the longer the market non trends, the better chance for a trend. Trader will be watching for the break and momentum.

GBPUSD tests Fibo support. Posted: 22 Feb 2012 05:55 AM PST The GBPUSD has moved below the 100 day MA at the 1.5692 level (blue line in the chart above). The pair is testing the 38.2% of the 2011 low to high trading range at the 1.56614 level (low 1.5659 currently).  The break below the 100 day MA is negative for the pair but failure to break the 38.2% could solicit some profit taking.  Traders will be eyeing the 1.5684 level which is the 38.2% of the last leg down today.

Greek Finance Minister confirms that the Bond swap will take place on March 12. Posted: 22 Feb 2012 04:46 AM PST Greek Finance Minister confirms that the Bond swap will take place on March 12. The Greek bonds will be issued under English law according to the finance minister.

US Existing Home Sales Data Due at 10AM EST Posted: 22 Feb 2012 04:23 AM PST US Existing Home Sales Data Due at 10AM EST

GBPUSD falls to 100 day MA and Fibo Retracement support. USDJPY breaks above 80.00 Posted: 22 Feb 2012 04:21 AM PST

EU on the Wires Posted: 22 Feb 2012 04:21 AM PST EU on the Wires Saying: ICAO should continue to work on global CO2 curbs on aviation It is sure EU legislation doesnt breach international law ICAO dispute procedure will side with EU Law allows ban on airlines for lack of CO2 compliance Hungary has ‘plenty of time’ to avoid deficit sanctions Iran must fully cooperate with IAEA Foreign ministers to discuss extending syria sanctions

The FXDD Morning Review Posted: 22 Feb 2012 03:43 AM PST The USDJPY has continued it’s trend move higher eclipsing the 80.00 level for the first time since October 31st 2011 – the day of the BOJ intervention. The price also moved above the high on that day at the 80.23 level.  The 50% retracement of the move down from the April 2011 high to the low reached on the same October 31st intervention day, comes in at 80.535 and is the next target for the pair today.  The Yen has been weakening on the back of better US data and the surprise 10 trillion dollar QE stimulus announced at their last policy meeting.  The move has also been supported by favorable technical which have pushed the price above the 100 and 200 day MA, and key  longer term trendlines.   In the UK today, the minutes of the BOE showed that two members voted for increasing the QE above the 50 billion decided. The dovish comments sent the GBPUSD down to the 100 day MA and 50% retracement level at the 1.5693-98 level.  A break of this level should solicit additional selling in the market today.  In the EU PMI data came out weaker than expectations with the EU composite index falling back below the 50 level (49.7 vs 50.5 expectations).  EU Industrial Orders were higher however at the +1.9% vs +0.5 expectations.  The HSBC Flash Manufacturing Index for China came in a touch better at the 49.7 vs 48.8 last month and Australia Leading Indicators from Westpac came in at +0.5%. Despite the better data, the AUDUSD is down on the day.  The pair fell and closed below trendline support yesterday and is showing signs of topping.   In the US today, Existing Home sales are expected to rise to 4.66 million versus 4.61 million last month. The high for 2011 was a  4.64 million pace.  The months supply in December was 6.2 months. The trend is favorable in housing. The market will be watching to see if it continues today. In Canada,

Fitch downgrades Greek long term ratings to “C” from “CCC”. Posted: 22 Feb 2012 03:35 AM PST

Eurozone Industrial New Orders (Dec) 1.9% vs. 0.5% expected. Posted: 22 Feb 2012 02:09 AM PST

MPC Meeting Minutes Posted: 22 Feb 2012 01:36 AM PST Vote was 7-2; interest rate vote was 9-0. Posen and Miles voted for 75 bln GBP increase in bond purchases. Some members saw a case for not increasing stimulus. Sees headwinds from tight credit, weak global growth. U.K inflation is likely to continue to ease. Growth to strengthen gradually. Majority saw risk that above target inflation would be more persistent. Majority feared large QE might send message that the economy is weaker than it really is.

Eurozone Flash Mfg. & Services PMI weaker than expected for February Posted: 22 Feb 2012 01:08 AM PST Mfg. PMI 49.0 vs. 49.4 expected Services PMI 49.4 vs 50.7 expected. Eur/Usd off on news, down to 1.3220.

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Forex Market Updates & Commentary

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• Canada Retail Sales Fall as Wholesale Sales Rise
• US Chicago Fed National Activity As Expected
• EU bailout new dominates the overnight activity.
• US Chicago Fed National Activity Due at 8:30AM
• The FXDD Morning Review
• Canada Retail Sales & Wholesale Inventories Data Due at 8:30AM
• EU’s Barrosso says he is confident that bondholders will participate in Greece deal.
• According to sources, talks on IMF funding will not accelerate until after March 1st-2nd Eurozone summit.
• Aussie breaks 1.06816 low
• UK public sector net borrowing was -10.7B; better than expected.
• UBS currency strategist says the FED may not wait until 2014 to raise rates as the economy picks up.
• Kiwi hourly support at .83565
• UK budget surplus 7.75 bln pounds vs forecast 6.3 bln pounds
• RBA’s Ridout says AUD appreciations is “jarring” for Australia, adds that it is rediculous to adjust to rate of AUD rise.
• Spanish Fin. Min. says Greek deal shows a strong defense of the EUR.

Canada Retail Sales Fall as Wholesale Sales Rise Posted: 21 Feb 2012 05:32 AM PST Canada Retail Sales:  Survey: -0.1%  Actual: -0.2%   Prior:  0.3%   Revised: 0.4% Canada Retail Sales Less Autos:  Survey: 0.1%  Actual: 0.0%   Prior:  0.3%  Revised:  0.4% Wholesale Sales:   Survey: 0.6%   Actual: 0.9%  Prior: -0.4%   Revised: -0.3%

US Chicago Fed National Activity As Expected Posted: 21 Feb 2012 05:30 AM PST US Chicago Fed National Activity Survey: 0.22, Actual: 0.22, Prior: 0.17, Revised: 0.54

EU bailout new dominates the overnight activity. Posted: 21 Feb 2012 05:23 AM PST

US Chicago Fed National Activity Due at 8:30AM Posted: 21 Feb 2012 04:35 AM PST

The FXDD Morning Review Posted: 21 Feb 2012 04:18 AM PST The long awaited Greece bailout agreement (not yet fully approved however), includes 130 billion euro of aid to Greece. In addition the Private Sector Investors agreement is for a 53.5% “haircut” on bonds. This was higher than the original 50% proposed in October but was needed in order to help bring what is a somewhat questionable 2020 debt to GDP projection to 120.3%. Greece cannot balance a 3 month budget. To expect a 2020 budget to be some value seems a bit of a reach.  In any case the target is needed to appease the IMF officials who otherwise might not participate in 130 billion bailout (fit the numbers to get the results).  There is one caveat, the Private Sector Bond holders have to agree on the new proposed haircut(i.e., bond swap) that will more than half the value of the bonds they own.   This process will be started immediately as Greece needs the approval of 100% of the bond holders (200 billion of debt) before the next key bond maturing date on March 20th.  If the don’t agree they will be forced to agree via Greece’s use of a Collective Action Clause (this would result in a default by the credit agencies. This is what is trying to be avoided).  Under the agreement, bond holders will receive 31% of their current bond holdings in the form of new bonds with maturities of 11 and 30 years and 15% in short term paper issued by the EFSF.  It seems negotiations on a PSI are more of an edict which may be a good thing.  In another cost cutting measure, the ECB will not participate in the PSI haircut but will funnel all profits from their holding of Greek bonds back to Greece.  So should Greece continue to pay interest (partly from the bailout) and mature bonds, the profits (interest gains) would be sent back to Greece. In effect Greece does not have an interest rate obligation on the 57 billion euro bonds that the ECB holds.  The interest rate on the first loan to Greece has also been reduced which was needed in order to balance the books as well.  The news sent the EURUSD on a reactionary move to the upside (high of 1.3292). The 100 day MA at the 1.3308 level seemed to have attracted the sellers and the pair is now down on the day.  In other news form Europe the Consumer confidence in the EU is expected to rise slightly but still remains negative at -20.1 vs -20.7 last month (to be released at 10 AM ET) . The low point going back to August 2009 was -21.3 in December so the improvement is off of a low level and not all that strong. In Switzerland, they announce their January Trade Balance of 1.55 billion CHF. This was worse than the 2.5B expected and was hurt by  a 3.4% decline in exports.   The USDCHF and ERUCHF have rallied off the news today.  The UK reported that Public Sector Net Borrowing declined by a larger than expected 10.7 billion (vs. -9.1B). January is a big tax collection month but it is indicative of improvement in the UK fiscal position.  The GBPUSD fell to the 100 hour MA in UK trading but found support buyers against the level (at the 1.5787 level currently). In economic data today, the US has Chicago Fed Activity index at 8:30 AM with expectations of 0.22 vs 0.17 last month.  In Canada Retail Sales -0.2 and +0.1 for the headline and the ex auto respectively will be released at 8:30 AM ET. Wholesale Sales will also be released at 8:30 AM ET with the expectations of a 0.6%.

Canada Retail Sales & Wholesale Inventories Data Due at 8:30AM Posted: 21 Feb 2012 03:48 AM PST

EU’s Barrosso says he is confident that bondholders will participate in Greece deal. Posted: 21 Feb 2012 03:12 AM PST

According to sources, talks on IMF funding will not accelerate until after March 1st-2nd Eurozone summit. Posted: 21 Feb 2012 03:11 AM PST

Aussie breaks 1.06816 low Posted: 21 Feb 2012 03:09 AM PST Risk has come off in recent trading with European equities are trading in the red, and Dow futures have come off but are still up. After breaking through the lows, the AUD/USD is now testing support at 1.0657; a level that showed support at the end of last week.

UK public sector net borrowing was -10.7B; better than expected. Posted: 21 Feb 2012 02:00 AM PST

UBS currency strategist says the FED may not wait until 2014 to raise rates as the economy picks up. Posted: 21 Feb 2012 01:58 AM PST

Kiwi hourly support at .83565 Posted: 21 Feb 2012 01:52 AM PST Currently the 38.2% fibo and 100 hour moving average both come in at .83565. If support holds we look to .84262 as the target.

UK budget surplus 7.75 bln pounds vs forecast 6.3 bln pounds Posted: 21 Feb 2012 01:40 AM PST Gbp/Usd up about 15 points since release to 1.5857.

RBA’s Ridout says AUD appreciations is “jarring” for Australia, adds that it is rediculous to adjust to rate of AUD rise. Posted: 21 Feb 2012 01:03 AM PST

Spanish Fin. Min. says Greek deal shows a strong defense of the EUR. Posted: 21 Feb 2012 12:08 AM PST

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Forex Market Updates & Commentary

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• EURUSD up on Greece Optimism. PBOC lower reserve requirement. Japan record trade deficit
• EU Leaders on the Wires
• The NY Morning Review
• Juncker says sizes for public aid still open for Greece
• Euro firmer after Bundesbank says ECB policy will remain “very expansionary”.
• Greek Finance Minister Source Says…
• Officials say Greek bailout approval is likely to take place the week of March 12th.
• S&P analyst says negative outlook for Japan means 1/3 chance of downgrade over the next 2 years.
• S&P keeps Japan rating at AA-, outlook negative.
• ECB’s director general for legal services says they are looking at how the Eurozone governments can channel profits from the ECB’s Greek bond holdings to aid Greece.
• 2-20 Economic Calendar
• China Sets Yuan Reference Rate @6.2938
• UK Rightmove House Prices Rose 4.4% MoM and 1.4% YoY
• Japan’s Trade Balance

EURUSD up on Greece Optimism. PBOC lower reserve requirement. Japan record trade deficit Posted: 20 Feb 2012 05:51 AM PST

EU Leaders on the Wires Posted: 20 Feb 2012 05:27 AM PST Say: Call for reinforcing single-market governance 11 EU leaders send letter to Barroso, Van Rompuy Europe economy at ‘perilous moment’ Must step up efforts on digital single market EU must create internal energy market by 2014 11 EU leaders deeper econ integration needed with U.S. Leaders urge Basel capital, leverage rules be fully applied Lagarde says Greece has made significant efforts on economy

The NY Morning Review Posted: 20 Feb 2012 04:30 AM PST The Peoples Bank of China signalled the intention to lower the reserve requirements banks need to hold on balances at the bank by 50 basis points over the weekend in a way to stimulate economice activity in a declining housing market and as a result of weakness expected by a slower Euro economy.  The move led to a move into risk on the Sunday night opening and that bias has remained as NY is set to open.  The dollar is down against all the major currencies.  Against the Yen the dollar has faired the best, nearly unchanged from Friday’s levels. Over night, the Trade Balance numbers for the month of January showed a record deficit of -1.48 trillion Yen.  Exports fell 9.3% from the same month last year, while imports increased on the back of high energy imports. Despite the worsening trade data, the USDJPY fell (Yen higher).  The market may be ready for a consolidation/correction after the move higher this month. Since the most recent low on February 1st at 76.02 the pair has move steadily higher to 79.88.  Along the way the price has moved above the 100 and 200 day MA (1st close above the 200 day MA since April 13th 2011.  On Friday, the price closed above the 38.2% of the move down from the April 11 high at the 79.36 level -  a bullish development. In today’s fall from the high, this retracement level is the low for the day.  A move below this level will be needed to give the seller/profit takers more comfort in their bearish move today.  In the EU, the leaders will be meeting in Brussels today to discuss whether or not the next tranche of aid will be heading to Greece (130 billion expected). The market seems to optimistic that a package will be approved today. Time is running short as on March 20, Greece is scheduled to pay off 14.5 billion EURO of maturing debt.  The details of the Private Sector Involvement in the restructuring of their bond holdings is also not yet resolved.    There is much to do still and although it seems that the expectation is for a solution today, there will always be the chance for continued market skepticism and or disappointment as the reality of Greece’s debt burden continues to weigh on the troubled country and the EU. For traders today, the US holiday (Presidents Day) will only make liquidity risk higher.  Event and market risk are already at a high level. So be sure to follow the technical clues from the markets price action.

Juncker says sizes for public aid still open for Greece Posted: 20 Feb 2012 04:24 AM PST He has added that: Nobody intends to have Greece outside Euro Area (it would be bad)

Euro firmer after Bundesbank says ECB policy will remain “very expansionary”. Posted: 20 Feb 2012 03:04 AM PST Building private spending to support growth. Sees no need to expand collateral riles in Germany. German growth outlook improved “perceptively”. Economy may strengthen in the second quarter.

Greek Finance Minister Source Says… Posted: 20 Feb 2012 02:59 AM PST There appears to be an agreement at Eurozone working group lowering interest rate on EU/IMF loans already paid out to Greece. There appears to be an agreement on particiaption in debt swap on Greek bonds held investment portfolios on Central Banks. Questions remain on whether profits from Greek bond portfolio should be transferred to Greece. Deeper haircut for Greece’s private bondholders still being discussed. Talks on Greece escrow account hav emoved forward. Appears deal to cut rate on first bailout is agreed.

Officials say Greek bailout approval is likely to take place the week of March 12th. Posted: 20 Feb 2012 01:22 AM PST

S&P analyst says negative outlook for Japan means 1/3 chance of downgrade over the next 2 years. Posted: 19 Feb 2012 11:44 PM PST Adds that a failure of sales tax legislation alone would not promp Japan downgrade.

S&P keeps Japan rating at AA-, outlook negative. Posted: 19 Feb 2012 11:41 PM PST

ECB’s director general for legal services says they are looking at how the Eurozone governments can channel profits from the ECB’s Greek bond holdings to aid Greece. Posted: 19 Feb 2012 11:18 PM PST

2-20 Economic Calendar Posted: 19 Feb 2012 08:34 PM PST

China Sets Yuan Reference Rate @6.2938 Posted: 19 Feb 2012 05:42 PM PST

UK Rightmove House Prices Rose 4.4% MoM and 1.4% YoY Posted: 19 Feb 2012 05:03 PM PST

Japan’s Trade Balance Posted: 19 Feb 2012 04:57 PM PST Japan’s January Trade Balance posted the largest deficit in over 20yrs at -1475B, close to estimates. The Yen pushed back off its worst levels since August. The initial bid in USDJPY to open the week was due to “progress” on the Greek aid package and China easing policy through reserve ratio’s.

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Forex Market Updates & Commentary

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Market settles in as the week comes to a close Posted: 17 Feb 2012 10:25 AM PST

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Forex Market Updates & Commentary

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• US Leading Indicators a Touch Lower Than Expectations 0.4% versus 0.5% Survey, Revision Also Improved to 0.5%
• USDCHF tests 200 hour MA
• Bobbys Corner-Open Market-Feb.17.2012
• EURUSD holds on the first test of key resistance
• GBPUSD chops around. Tests days midpoint and intraday 100 bar MA
• ECB Knot says more should be done to get debt to GDP to 60%
• US Consumer Price Index Data Slightly Lower
• Canadian Leading Indicators MoM Lower Than Previous
• The EURUSD between the 100 and 200 hour MA. Approaches resistance area
• ECB considering to allow bonds held in EU Central banks to be subject to PSI writedowns
• GBPUSD advances on better retail sales. USDJPY continues advance higher
• The Morning Forex Review
• German President Wulff announces resignation.
• UK Retail Sales 0.9%; stronger than the -0.3% expectation (0.6% prior).
• SNB’s Moser says CHF remains strong, cap countered massive over valuation. Ready to act if needed.

US Leading Indicators a Touch Lower Than Expectations 0.4% versus 0.5% Survey, Revision Also Improved to 0.5% Posted: 17 Feb 2012 07:01 AM PST US Leading Indicators a Touch Lower Than Expectations 0.4% versus 0.5% Survey, Revision Also Improved to 0.5%

USDCHF tests 200 hour MA Posted: 17 Feb 2012 06:23 AM PST The USDCHF has been in a narrow range consolidation range after the sharp move lower yesterday found support buyers between the 100 and 200 hour MA (blue and green lines in the chart above).  Today the price has been mainly confined by those two moving averages once again.  There were a couple bars which closed above the 100 hour MA, but the midpoint of the weeks range was another hurdle on the topside. Now the price is testing support against the 200 hour MA. On a break, traders will be looking for the bar to develop momentum to the downside and ultimately a close below the MA level (at the 0.9156 level currently).  Until the break, trader’s may continue to look at the level as an area to buy as the weekend approaches.

Bobbys Corner-Open Market-Feb.17.2012 Posted: 17 Feb 2012 05:49 AM PST Good Morning: This is just like last Friday: The markets are jittery ahead of next Monday’s vote on the latest Greek bailout program.  Traders will be scared to be short Euro this weekend-as no one knows what new developments will occur over the weekend-it is always something. Northern European countries are concerned that Greece will not be up to actually implementing the latest austerity measures, which are necessary to proceed with the 2nd bailout package. Crude oil is now about to approach $103/bbl-as the tension between Iran and the majority of the world continues. Gold and Silver continue to climb today. World equity markets are higher-along with Us Futures. HAVE A GREAT DAY-WEEKEND & GOOD LUCK We will be at the NY Traders Expo Feb. 19-21 in NYC- if you are in the area-please stop by to say hello.

EURUSD holds on the first test of key resistance Posted: 17 Feb 2012 05:43 AM PST The one thing to consider with this key level is the low to high trading range for the EURUSD is still at a very narrow level at 75 pips. As a result, the market has some room to roam on a break higher. The 1.3115 is the next target above (high from Tuesday).

GBPUSD chops around. Tests days midpoint and intraday 100 bar MA Posted: 17 Feb 2012 05:40 AM PST Better UK retail sales sent the GBPUSD higher but choppy action has taken charge. The pair is back at the days midpoint a tthe 1.58243 level and the 100 bar MA on the 5 minute chart is close by at the 1.5920 level.

ECB Knot says more should be done to get debt to GDP to 60% Posted: 17 Feb 2012 05:33 AM PST Earlier the central banker said: Bond markets have calmed down Hopes EFSD is increased significantly Crisis is not a crisis of Europe

US Consumer Price Index Data Slightly Lower Posted: 17 Feb 2012 05:33 AM PST Consumer Price Index MoM:   Survey:  0.3%  Actual:  0.2%   Prior: 0.0%  Consumer Price Index YoY:    Survey: 2.8%   Actual: 2.9%   Prior: 3.0%

Canadian Leading Indicators MoM Lower Than Previous Posted: 17 Feb 2012 05:30 AM PST Survey: 0.6%, Actual: 0.7%, Prior: 0.8%, Revised: 0.7%

The EURUSD between the 100 and 200 hour MA. Approaches resistance area Posted: 17 Feb 2012 05:26 AM PST The EURUSD approaches the 200 hour MA, the 61.8% retracement, and the downside trendline all at the 1.3183-91 area. This level is key resistance for the pair and I would expect some profit taking against the level.  A move above would open the door for further upside gains with the 1.3215 the next target. On the downside, the price held the 100 hour MA on the last dip down. This gave traders the confidence to push the price higher. A move below the level later today would open the door to further downside momentum.

ECB considering to allow bonds held in EU Central banks to be subject to PSI writedowns Posted: 17 Feb 2012 05:19 AM PST This is contrary to the report yesterday that they would be immune from PSI haircuts/writedowns. The chance according to sources is 50-50 though.  Yesterday it seemed like a certainty that they would be immune. Today, they are rethinking the idea.

GBPUSD advances on better retail sales. USDJPY continues advance higher Posted: 17 Feb 2012 05:12 AM PST

The Morning Forex Review Posted: 17 Feb 2012 04:47 AM PST The GBPUSD received a boost this morning from better than expected Retail Sales. Total Retail Sales increased by 0.9% in January versus expectations of -0.3%. This came on the back of a 0.6% gain in December. Ex Fuel, the gains were even better with sales rising by 1.2% (expectations -0.3%). The gains pushed the GBPUSD above the 61.8% of the move down from the Feb 8th high at the 1.5818. The 200 day MA at the 1.5914 level today is the next key target on the topside for the pair. On Feb 8th, the price tested the MA level and fell off. In the Eurozone, officials seem eager to come to a conclusion. Yesterday, the Greeks announced they had completed the process to satisfy the EU/IMF and today the Greek Government is to submit the bill to parliament outlining the spending cuts. THe Eurozone leaders are scheduled to meet on Monday. Today, concensus of a conference call between Greece’s Papademos, Germany’s Merkel and Italian’s Monti was of “optimism”with Monti commenting that the leaders are confident of a Greek deal. Yesterday the EU Central banks announced that they will look to swap there Greek bonds for new bonds as a way to not be caught up in any restructuring haircut that would weaken the bond holdings of the member states. There is concern today that such an arrangement might make private bondholders of other EU debt, subordinate and this may lead to selling of the troubled debt of countries like Portugal. The EURUSD starts the NY day higher versus yesterday’s close, but still in a narrow trading range. The pair targets the 200 hour MA (at 1.3183) which held resistance on Wednesday. The USDJPY continued its march higher after the surprise QE announcement by the BOJ earlier this week. The pair is now at the highest level since October 31st when the BOJ secretly intervened in the currency market. The high on that day reached 79.52 and this is the next target. Canada announced CPI a touch higher (0.4% vs 0.3%). US CPI will be released at 8:30 AM with exp. of 0.3% (core 0.2%). Leading indicators are expected to rise 0.5%.

German President Wulff announces resignation. Posted: 17 Feb 2012 02:08 AM PST

UK Retail Sales 0.9%; stronger than the -0.3% expectation (0.6% prior). Posted: 17 Feb 2012 01:32 AM PST (Y/Y) -2.0% vs. 0.5% expected (2.6% prior). Ex. Auto Fuel (Jan) 1.2% vs. -0.3% expected.

SNB’s Moser says CHF remains strong, cap countered massive over valuation. Ready to act if needed. Posted: 17 Feb 2012 01:25 AM PST

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Forex Market Updates & Commentary

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• GBPUSD surges higher. Resistance at 1.5772-85 eyed.
• USDJPY showing signs of consolidation/correction mode
• The headlines have the EURUSD trading in a choppy fashion
• Philadelphia Fed Survey Improves
• German Ministry says PSI may start Feb 22nd and end on March 9th
• Source: Bridge loan for Greece off the table
• Rumors of Greece bridge loans being off the table
• USDCHF falls below trendline and MA signaling the end of the trend (for now)
• Dutch Finance minister says large chance of a Greek selective default swap
• Philadelphia Fed Imminent at 10AM
• EURUSD tests 200 bar MA and 38.2% retracement on intraday chart
• EURUSD bounces off the 50%. Tests resistance
• Bobbys Corner-Open Market-Feb.16.2012
• US Jobless Claims Move Even Lower to 348K, Housing Starts Improve Slightly, Building Permits Weaker
• Canadian International Securities Transactions and Manufacturing Sales Index both lower than forecast

GBPUSD surges higher. Resistance at 1.5772-85 eyed. Posted: 16 Feb 2012 07:52 AM PST The GBPUSD broke above the 100 hour and trendline support and this led to a sharp move higher in the GBPUSD (see blue line in the chart above). The move has pushed the price up through the 38.2% and toward the next key target against the 200 hour MA at the 1.5777 level.  This and the 50% retracement of the move down from the Feb 8th high, should slow the upward momentum.  A break above this area, should not be ignored however. Looking at the daily chart, remember the highs from November and December. The 1.5794, 1.5778. 1.5772, 1.5768 were highs.  These highs capped the price for over two months.  This should also slow the move back higher and/or ignite more buying on a break higher.

USDJPY showing signs of consolidation/correction mode Posted: 16 Feb 2012 07:18 AM PST The USDJPY has fallen below trendline on the shorter term chart and this has the USDJPY on the defensive. The downside targets show support at the 78.71/75 area where the 100 bar MA and the 38.2% of the move higher today is found. Looking at the hourly chart the price has marched higher for the entire month, the low was reached on Feb 1 ast the 76.01 level (not shown in the chart below).  The high today has reached 78.93.  The last leg higher off the lows on Monday and Tuesday have trendline support line target at the 78.58 level.  The 38.2% of the move up this week comes in at the 78.325 level. These also be come downside targets if the price can develop more downside momentum. Traders looking for a correction would prefer to see the price stay below the 78.84/86 level (tight stop).  A move below the 100 bar MA on the 5 minute at 78.75,  would target trendline on the hourly at 78.58 and then the 78.32 38.2% retracement off the hourly.

The headlines have the EURUSD trading in a choppy fashion Posted: 16 Feb 2012 07:02 AM PST The EURUSD has been trading in a choppy fashion as headlines from EU/German sources dominate . The next topside target is the topside trendline on the hourly chart at the 1.3048 level and the 38.2% of the move down from the high yesterday. That level comes in at the 1.30577 level.

Philadelphia Fed Survey Improves Posted: 16 Feb 2012 07:02 AM PST Philadelphia Fed:  Survey:  9.0   Actual:  10.2   Prior: 7.3 February 12″ vs  January 12′ Futures Index: 33.3 vs 49.0 Prices-Paid: 38.7 vs 31.8 New Orders: 11.7 vs 6.9 Employment: 1.1 vs 11.6

German Ministry says PSI may start Feb 22nd and end on March 9th Posted: 16 Feb 2012 07:00 AM PST Adds that Greece wants 135 b (up from 130B)

Source: Bridge loan for Greece off the table Posted: 16 Feb 2012 06:58 AM PST These comments come from reports after the conference call yesterday with Economic Finance Ministers This means that Greece will have to come with the neccesary austerity cuts and agreements and that the EU/IMF must all agree they are worthy of the bailout funds.

Rumors of Greece bridge loans being off the table Posted: 16 Feb 2012 06:58 AM PST Rumors of Greece bridge loans being off the table

USDCHF falls below trendline and MA signaling the end of the trend (for now) Posted: 16 Feb 2012 06:48 AM PST The USDCHF fell below trendline and the 100 bar MA on the 5 minute chart and this has prompted some profit taking selling in the USDCHF. The trend is still up but there could be additional selling that could take the price to 0.9257 and then a test of the 38.2% of the move up from yesterday’s low at the 0.92433 level.

Dutch Finance minister says large chance of a Greek selective default swap Posted: 16 Feb 2012 06:38 AM PST He does not rule out a bigger PSI on Greece Greek debt sustainabilityis still insufficient

Philadelphia Fed Imminent at 10AM Posted: 16 Feb 2012 06:22 AM PST

EURUSD tests 200 bar MA and 38.2% retracement on intraday chart Posted: 16 Feb 2012 06:17 AM PST As per the prior post, the 1.3020 area is key resistance for the pair today (on an intraday basis). The EURUSD has moved up to test this level on a report thar a Euro bond swap may be done by Monday.  This is unconfirmed but forced the market price higher.  Now a Dutch Finance Minister is on the news wires saying there is no agreement on a 2nd program for Greece.  So news headlines has the market on edge. The bounce off the 50% of the 2012 range stopped the decline today. The  move above the trendline (in chart above) and the 100 bar MA (blue line), gave shorts cause for pause.  Now it is up to the profit takers  and those who are still inclined to sell the EURUSD.   A move above the key intraday resistance at 1.3020 is a vote for the buyers. A  move below the 100 bar MA (blue line at 1.3002) and the trendline (at 1.2997 curently) below, is a vote for the sellers.

EURUSD bounces off the 50%. Tests resistance Posted: 16 Feb 2012 05:40 AM PST The EURUSD found support/profit taking buyers in the early NY session, off the 50% retracement of the move up from the 2012 lows. Better US data has led to a flight into risk and as a result the EURUSD has bounced higher. The pair  is looking toward the next resistance target at the 1.3012 level (shallow trendline in the chart below).  Above level is the more important 38.2% of the move down from late Wednesday’s high. That level comes in at the 1.30206 level.   The 200 bar MA on the 5 minute chart is also at that level currently.  As a result, the level if tested, would likely solicit good sellers on a test. The move off the key support and move through the topside channel in the chart below will likely give sellers a reason to buy dips and rest.   I will watch 1.2987-89 for support buyers on a dip

Bobbys Corner-Open Market-Feb.16.2012 Posted: 16 Feb 2012 05:35 AM PST Good Morning: Oh- the Greek sage: With uncertainty being the main theme-the euro lost steam-and the EUR/USD fell below 1.30. With the March 20 deadline on a 15 billion euro bond payment due-there is now talk of a bridge loan to Greece-if the bailout package cannot be completed in time.  This would be some what chaotic for the markets-but the thought is that Greece is holding elections in April-and the Troika would like to insure that the austerity measures passed will continue with the new (which there probably will be) government and Prime Minister. Market participants will be looking for next Monday’s meeting of EU finance ministers for any new signs of progress. In other news-Moody’s has commented that they will review and may cut 17 global and 114 European financial companies as the debt crisis in the euro zone continues to spread. Oil is still over $101/bbl-as the Iranian situation continues to heat up. World equity markets and US Futures are lower today. HAVE A GREAT DAY & GOOD LUCK

US Jobless Claims Move Even Lower to 348K, Housing Starts Improve Slightly, Building Permits Weaker Posted: 16 Feb 2012 05:32 AM PST USD/JPY Trading at session highs on the news.   Jobless Claims:  Survey:  365K    Actual: 348K   Prior: 358K    Revised:  361K    Continuing Claims:  Survey: 3490K    Actual:  3426K    Prior: 3515K   Revised: 3526K Producer Price Index (MoM):     Survey: 0.4%    Actual: 0.1%     Prior: -0.1%   PPI Ex Food & Energy (MoM):    Survey: 0.2%    Actual:  0.4%       Prior: 0.3%    Producer Price Index (YoY):     Survey:  4.1%    Actual: 4.1%      Prior: 4.8%  PPI Ex Food & Energy (YoY):     Survey: 2.7%    Actual: 3.0%     Prior: 3.0% Housing Starts:    Survey: 675K    Actual: 699K    Prior: 657K   Revised: 689K Housing Starts (MoM)%:    Survey:  2.7%    Actual: 1.5%    Prior:  -4.1%    Revised:  -1.9% Building Permits:    Survey: 680K    Actual: 676K    Prior: 679K    Revised: 671K Building Permits (MoM)%:    Survey:  1.3%    Actual:  0.7%    Prior:  -0.1%    Revised:  -1.3%

Canadian International Securities Transactions and Manufacturing Sales Index both lower than forecast Posted: 16 Feb 2012 05:30 AM PST International Securities Transactions Survey: 10.00B, Actual: 7.38B, Prior: 14.99B, Revised: 14.64B Manufacturing Sales Index (MoM) Survey: 2.0%, Actual: 0.6%, Prior: 2.0%, Revised: 1.9%

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