USDCHF testing floor again and finds profit takers

The floor at 1.0810 continues to find the profit taking buyers.  Looks like short covering may ensue. A correction would 1st target the 1.0864 to 1.0870 level where highs and lows and the 100 bar moving average on the 5 minute chart is located.   A move below the 1.0802 is needed on the downside.

USDCHF floor being tested.

1.0810 is the key, key level.  Low has reached 1.0802.  Back above.  Will it find the momentum selling against the level?  Crossroad time.

The second test at resistance in the EURUSD leads to the break

The EURUSD held the 100 hour moving average (1.3953 level) on first attempt (see earlier post) and came off to 1.3906.  The 2nd time up has not been so lucky. 

The price just moved above the 1.3953 level (100 hour moving average) and hit stop buying.  The high has reached 1.3879.  The 1.3953 should now act as support for the pair.  Dollar remains pressured.

DOE CRUDE: -5.4M V -700KE;
GASOLINE: -537K V -1.5ME;
DISTILLATE: +250K V +1ME;

Crude inventories are down much more than expected.  Inventories remain high but market bias may keep price rising.  Crude oil is up around $1 on the day and moves toward $65 per barrel.  Higher oil is bearish for USDCAD.

ECB Weber on the newswires

Weber speaks in Reichenau Island, Germany

•  CRISIS SHOWS HOW VALUABLE ECB’S MONETARY ANALYSIS IS
•  CENTRAL BANKS NEED TO TAKE LONGER-TERM PERSPECTIVE
• NOT SAYING PRICE STABILITY GOAL SHOULD BE DOWNGRADED
• SYMMETRIC POLICY MAY MEAN RATES RISE WHEN INFLATION LOW
• NEED SYMMETRIC MONETARY POLICY ACROSS ASSET-PRICE CYCLES
• MONETARY POLICY SHOULD AVOID INSURANCE EFFECT
• RISK-TAKING MAY INCREASE IF RATES DROP WITH ASSET PRICES

I wonder if symmetric policy also means lower rates when inflation is high.  When oil and commodity prices were pushing up inflation in early to mid 2008, the ECB was slow in cutting rates on the slowing of growth due to the high inflation.  This may have helped contribute to a worsening of economic conditions.

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New Home Sales come in below expectations. Mortgage Delinquencies higher

New Home Sales come in at 352M annualized sale pace.   The month supply of homes on the market falls to 10.1 months from 10.6 months, but still remains elevated (normal is 5- 6 months). The number of homes for sale continued to decline in April, falling to 297,000 as supply continues to be absorbed and builders stop the building.  The total for sale was 370,000 in November 2008. 

The Mortgage Bankers Association, also reported that 12.07% of US household mortgages are either late at least one payment or in the foreclosure process.  The MBA stated that they estimate the number of foreclosures are low to various state and local moratoria which have halted the foreclosure process.

Mortgage Delinquincy which does not include loans in foreclosure, came in at 9.12%  This is the highest rate according to the Mortgage Bankers Association (going back to 1972)

The data is a reminder of the continued issues within the housing industry and of the pressures on consumers balance sheets and is not positive for stocks/meaningful economic recovery idea.  Commodities may come under some pressure which may lead to a sell off of some of the commodity currencies like CAD (USDCAD up) and AUD (AUDUSD down).  NZDUSD may also come under pressure.

EURUSD tests 100 hour MA currently. Look for some resistance

EURUSD testing 100 horu MA currently at the 1.3953 level.  Look for intraday profit takers to emerge at least initially at this level.  Watching closely.