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$AUDUSD moves further away from the longer term trendline break

The AUDUSD closed below the long term trendline that has been holding up the market since March 2009 yesterday. The selloff continued today as the market wonders if ambitious building initiatives are over ambitious. This may bring into question the infrastructure changes in China and other developing nations of which Australia is a resource provider.  Admittedly, this is just guilt by association but the market is shaken. 

Whether true or not from a fundamental perspective, the technical charts will tell the story. The breaking of the long term trendline is a negative development. Now what? 

The 5 minute chart is likely to give some clues to the market.  The price has been tracking below the 100 and 200 bar moving averages since early yesterday. The market just had its most impressive correction which took the price up to test the 200 bar MA on that chart.  The price reached a high of 0.9045 above the 200 bar MA at 0.9038. However, there was no follow through and the price has fallen again.

The 100 bar moving average on the same chart comes in at the 0.8997. This is a key supprot level that if broken should lead to lower levels.

Watch these levels (in particular the action at the 200 bar MA on the 5 minute chart).  If the price stays below, there could be further corrective selling.  

On the downside, the 89.04 is next key support which is the low close for November.  Should extensive selling materialize, the market could correct toward a longer term target of 0.8754. This is the 38.2% retracement of the last leg higher in the AUDUSD from the July low to the November high (see daily chart) . The 100 day MA comes in at the 0.8704 level currently which is also key support.

It would not be unusual for this type of move, if the price can continue to remain below the key shorter term moving averages that drive the intraday trading market (and bias).  Watch the short term charts but be aware of longer term potential targets.

$GBPUSD corrects higher. Slows at the 200 bar MA and the key 100 day MA at 1.6411.

The Dubai World debt issues have led to banking worries and this in turn has hurt the GBPUSD.  The price plunged down to a low of 1.6267 level but has rebounded to a high of 1.6440.  In early NY trade, Dow stock futures rebounded from -220 to down about -180.  The rebound led to the knee jerk move back higher in the currency pair.  The stock market reaction will be the big influence in today’s trading. 

From a technical perspective, the market will be paying attention to the 100 day moving average today which comes in today at the 1.6411 level.  This level also corresponds roughly with the 200 bar MA on the 5 minute chart which is currently at the 1.6408 level.  The support off the same chart comes in at the 1.6375 level where the 100 bar MA is found. A break below this level should intensify the selling interest. 

Watch the 1.6411 level today. Below the level is bearish. Above the level is bullish.   It is THE key level as the week comes to a close.

November 27th 2009 Morning Forex Commentary is available for viewing

EURUSD awaits NYs entrance near the short term resistance level

The EURUSD awaits the NY traders coming back from their Thanksgiving holiday with the price of the EURUSD just at the shorter term charts 100 bar moving average (blue line).   The level comes in at the  1.4904 level.  The price moved above and below  the MA line in the last few hours. 

I would expect selling initially against stops above the level.  The US stock market action today will be of great interest to the market. Oil is down $3.73.  Dow Futures are down 220 points, and Gold is down $22 as the flight to quality following the Dubai debt issues continues. However reports from Black Friday sales will also be of interest as the Christmas holiday season sales start.  It should not be your normal day for sure.

A break to the upside will look toward the green line in the chart above at the 1.4944 currently (and coming down).  The 38.2% retracement level is at the 1.4949 as well.  On the downside the 1.4888 level is the low from November 24th. This level has held over the last couple of hours of trading.  A break of this level is needed to push the market further down.  

A level to keep in mind for the EURUSD is the trendline in the daily chart below which comes in at the 1.4810 level.  Mark this level down on your trading pad by your desk as a key support level. SHould it be broken the longer term trend higher weakens a bit more. 

Gbp/Usd tests 38.2% retracement and gives some back

Gbp/Usd just tested the 38.2% Fibo of move from 1.6745 down to 1.6267. The pair ran up to 1,6445 and has since given back 25 points. The pair will probably make another run up. It will be interesting to see if we can hold for a 2nd time. Otherwise a pullback to the 1.6385-90 level is likely.

Swiss KOF Economic Barometer

The KOF Economic Barometer is the combined reading of 12 economic indicators related to banking confidence, production, and housing.  For the month of November it came in at 1.62; slightly lower than its forecast of 1.78 and prior reading of 1.45. The CHF, as well as the rest of the market, showed little reaction to the release.

Euro-Zone Consumer Confidence

Confidence in the Euro-Zone came is as expected for November.  The EUR, currently trading mid-range for session, had a limited reaction to the following data:

• Business Climate Indicator – Survey: -1.65  Actual: -1.56   Prior: -1.78
• Consumer Confidence – Survey: -17   Actual: -17   Prior: -18
• Economic Confidence – Survey: 88.0   Actual: 88.8   Prior: 86.2
• Inductrial Confidence – Survey: -19   Actual: -19   Prior: -21
• Services Confidence – Survey: -6   Actual: -4   Prior: -7