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GBPUSD moves higher in sympathy with bailout talk

The 1.5689 level is the 38.2% retracement level of the 2009 high to low range. The 1.5706 level is the low from October 2009. The market should find resistance against these levels. However, of more significance may be the break of the range that has put a strangle on the GBPUSD for the last two days. The highover that period should now be support at the 1.5658 area.

Markets react to EU comments on Greece. Tests the 2009 midpoint level at 1.3800

A comment by a German official regarding support for Greece has sent the EURUSD sharply higher and the dollar lower as funds flow back into the risk currency pairs including the USD and JPY. 

The EURUSD moved back above the 100 hour MA at the 1.3743 and held the level on a correction lower.  The low price  came down to 1.3751.  The pair is now up testing the 1.3800 level which is the midpoint of the 2009 low to high trading range.

A break could see the price move up to test the 200 hour MA at the 1.3843 level.

Eurozone source on wires regarding Greece. EURUSD moves sharply higher

Eurozone officials have agreed in principal to help the Greece according to a senior German coalition source. The most likely source of help would be bi-lateral help.

The support would be given on the back of clear budget cutting initiatives.

AUDUSD moving toward support at the 100 hour MA

The currently level comes in at 0.8709.

Bernanke testimony tomorrow postponed due to the weather

Due to the snowstorm which is wacking the east coast, the Bernanke testimony has been postponed tomorrow.

Next Online Training Today @ 4pm Register

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GBPUSD moves back to midpoint of the two day trading range

The GBPUSD has moved down to the midpoint of the two day range as the pair continues its up and down consolidation.  The 100 and 200 bar MA on the 5 minute chart are converged at the 1.5604 level and these levels are also being tested.  A break lower should target the low of the range.  Needless to say, a breakout is still eyed.  The longer the market non-trends the better the chance for a break. 

This last fall is being attributed to a Fitch comment on the newswires which says the risk for sovereign funding costs for the UK are on the upside and the UK is the most vulnerable of the AAA sovereigns.

USDCHF tracking the 100 bar MA today on the 5 minute. Below 100 hour MA

The USDCHF has stepped lower today using the 100 bar MA on the 5 minute chart as a level to sell against (see blue line in the chart above).  The current level comes in at the 1.0684 level and this level will be watched - especially since the price has had a higher high off the low for the day at the 1.0655 level (last lows found buyers at 1.0662).

Keeping the pairs bias down is also the 100 hour MA.  The last step down took the pair below this moving average level at the 1.0679 level currently.  This the first move below since February 3rd.  On that day, the price dipped to the 200 hour MA and bounced sharply higher.

As long as the price can remain below these key technical levels, the price bias remains to the downside. However, watch the 1.0662 level  (last low on the 5 minute chart and double…

Greece reports measures to deal with debt issues

Including:

• 40% tax rate on incomes above 60,000 Euros
• Tax bracket increased to 7 from 3 prior
• Repatriated funds will pay only 5% tax
• Tax Dividens as personal income
• Freezes public sector pension above 2,000 euros a month
• Will cut all public sector salary supplements in 2010 by 10%

US Wholesale Inventories rise by +0.8%

Sales rise by an equal 0.8%. The Stocks/Sales ratio falls to 1.12 months from 1.14 months

IBD/TIPP Investor Confidence falls to 46.8 from 48.8 in January. Less than expectations.

AUDUSD boosted higher today. Watching 0.8733 and 0.8714

Comments from RBA Stevens earlier today whereby he commented that rates may need to be raised to stop bubbles, sent the AUDUSD higher today.  The price was able to push above the 100 hour MA (currently at 0.8714) in the NY session, but has come off a bit as the dollar corrects on the EU/Greece on again/off again rollercoaster (see Nowotney Comment).  From a technical perspective, however, as long as the price remains above the 100 hour MA, the targets above are the 61.8 of the move down from the Feb 3rd high at the 0.8787 and the 200 hour MA at the 0.8800 level currently.  There is also consolidation lows at this area from February 4th which should act as profit taking resistance.

Looking at the longer term daily chart, the price has also moved above the low from December which came in at the 0.8733 level today.   Watch this level…

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ECB Nowotney on wires. Discusses no bailout clause.

Says ECB has a strict no bailout clause.  As a result, Greece will have to bail themselves out. The EURUSD is coming under some pressure as a result of the announcement. A break below the 1.3744, the old high from the day is needed and should pressure the pair further.  If the pair can not move below, the bias up should be maintained.

USDJPY moves higher. Watch the 100 bar moving average on the 5 minute chart

The USDJPY was consolidating in a narrow trading range and at the 89.18 to 89.45 level yesterday. The 100 and 200 bar moving averages converged with the price and this eventually leads to a move away from the consolidation area.  The price has moved higher albeit at a modest pace as the flight into the “riskier pairs” moved the USDJPY higher.

The price has been able to maintain a level above the 100 bar MA with a test in the London session. We will continue to watch this moving average in today’s trade as well.  The level comes in at the 89.58 level currently. A move below would turn the bias back down, but until that time, the bias remains bullish for the pair. The next target for the pair comes in at the 89.82 level where the 100 hour MA is located.  A break of this level should see a…