The Forex overnight review

• The EU/IMF also made it clear that without the desired cuts and without full agreement from the 3 parties in the ruling party,  they would not approve the 130 billion
  tranche.  In early NY trade today, the Laos Party leader(the smallest of the 3 parties in Greece) said they could not vote “for” the austerity package and as a result, the EURUSD had
  moved below the 100 hour MA , and 38.2% retracement. The next key target for the pair would be the 50% and 200 hour MA at the 1.31738 level.  A move below this level is needed to keep the pressure to the downside.  Failure to breach the level will give the dip buyers another opportunity to buy on sale with limited/defined risk.  The vote on the austerity program is scheduled for Sunday and although there is a majority, the demands from the EU/IMF that all three parties agree, may still stop the troika money from being released. It is never easy.
•  In other EURO area news, German CPI fell by 0.4% which was as expected. The YoY measure of 2.3% equaled last months value and is at the lowest level since March 2011.  With dual 0.5% increases from last year coming off in the next 2 months, it will likely send German inflation below 2%. This will give the ECB room to ease if a slowing economy warrants.
• China Trade Balance rose sharply to 27.2 b but was likely distorted by a 4 day holiday in China. The Yuan rose to the highest level in 18 months against the dollar.  China officials will be heading to Washington next week and rising the currency may be as much a reaction to that trip.
• IN Australia the RBA cut GDP and CPI targets in 2012. They now see 2012 growth expanding by 3.5% from 4% in 2012. As far as inflation, they estimate CPI inflation to come in at 3% in 2012 vs previous estimate of 3.25%. The news along with “Risk Off” flows from Greece has sent the AUDUSD down from its 6 month  high levels
• US Trade Balance is due at-48.5 B vs -47.8B last month.
• The Univ of Mich Confidence is expected to dip to 74.8 from 75.
• In Canada, the their Trade balance is expected to dip to 0.80b from 1.07B last month.