CompassFX Webinar with Greg Michalowski Thursday 4:00PM
CompassFX is having a special webinar with Greg Michalowski this Thursday 4:00PM
Markets are correcting from extremes
NZDUSD tests 100 hour moving average support at 0.6273. The Reserve Bank of NZ meets later today (5:00 PM) and announces interest rate decision.
GBPUSD has moved below 200 bar MA support. 1.6330 next level and then the low for the day at 1.6294.
The EURUSD moved below the 100 hour MA at the 1.4028 level on its way to a low of 1.3995. The bias is bearish as long as the price remains below the moving average.
AUDUSD went to test the 200 hour and bounced. This pair likes to use the 200 hour as a spring board. This is what has happened so far.
Forex Market Update for June 10 2009
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Greg and Shawn take an intensive look at two of the commodity currencies this morning. In review are the New Zealand dollar and the Aussie dollar. We haven’t looked at the NZD in while and it was interesting to talk about the developments in this pair, with the upcoming meeting later today. We also review the Euro and the Sterling, which is currently the pair to follow.
Thanks for all of your comments and feedback. You can also email us if you have a suggestion to improve the show or if you would like to see a specific currency pair.
EURUSD at the 100 hour MA as hour bar closes.
The EURUSD is at the 100 hour Moving average and looking for the momentum break on the downside. The hourly bar is closing at the moving average level after dipping below in the hour (to a low of 1.4020). If break and momentum cannot be established. the price will likely move back higher. Watching closely.
GBPUSD tests intraday support. Could correct further on a break.
The GBPUSD has been holding the 100 and 200 bar MA on the 5 minute chart for a good portion of the last two days (see chart above). The price is currently testing the 200 bar moving average level at the 1.6350 level. A break of this level followed by a move below the 1.6330 area will target the next level on the downside at the lows for the day at the 1.6294 level. Watching this pair closely. We could be ready to correct from the sharp move higher over the last few days. If the price is able to hold, however, don’t ignore the upside momentum.
Key time for the GBPUSD
EURUSD comes back into comfort area
The EURUSD took a look at the 61.8% Fibonacci Retracement level and backed off. The level, calculated off the high of 1.4338 and the low of 1.3805, comes in at the 1.4134. The high reached 1.4143, (see chart above)
When momentum at the level could not be maintained, the price backed off back below the 200 hour MA (currently at the 1.4106 level). The price remains above the 100 hour MA which currently comes in at the 1.4033 level. These levels will be watched as support and resistance for the time being.
The overall bias is cautiously positive as the price remains above the 100 hour moving average but failed on the move above the confirming 200 hour MA. Longs will likely be selling against the 200 hour moving average on the back of this failure – with buying if the price is able to move above the key level
A move below 1.4033 will shift the bias back to bearish. Quiet and range bound looking for the next break.
CompassFX Webinar with Greg Michalowski Thursday 4:00PM
CompassFX is having a special webinar with Greg Michalowski this Thursday 4:00PM
AUDUSD moved sharply higher overnight. Testing support.
Yesterday, the AUDUSD held the 50% retracement resistance of the move down from the June 3rd high to the low on June 8th at the 0.8044 level. Today after an initial move lower, marched higher and breached the level.
The move above targeted the 61.8% retracement level and was able to get through tat level at the 0.8095. The high reached 0.8133 so far.
Since then, the price has backed off the high to test intraday support against the 0.8095 level. The 5 minute 100 bar MA is currently near the level (see chart below). The market has been testing this level in the last hour but has not been able to muster downside momentum as of yet.
This level will be watched for support. A break with momentum selling through the level is likely to lead to some additional corrective forces to the downside, with a move down toward the 0.8044 level as the logical first target.
The pair is being buoyed by increased stocks, increased commodities (oil at 7 month high)and a look ahead at China Industrial Production which will be announced tomorrow.
The bias on the chart moved positive yesterday when the price moved above the 100 hour moving average at 0.7972 level.
Weber comments on newswires this morning
- LEANING AGAINST THE WIND NOT NECESSARILIY LINKED TO RATES
- IMPORTANT TO MONITOR RISKS EVOLVING FROM BOOMS
- PRICE STABILITY IS PREDOMINANT GOAL FOR THE ECB
- CENTRAL BANKS MUST MONITOR BOOMING REAL ESTATE MKTS
- ECB’S REFI MEASURES LED TO NEW SYSTEM OF REFINANCING
- HIGHER CORE CAPITAL RATIO MAY BE GOOD IN LONGER TERM
- HIGHER CAPITAL RATIO COUNTERPRODUCTIVE DURING CRISIS
- WARNS AGAINST DEMANDING HIGHER CAPITAL RATIO FROM BANKS
- ECB’S COVERED BOND PURCHASES SHOULD REDUCE SPREADS
- ECB EXPECTS 12-MTH REFIS TO LOWER LONGER-TERM RATES
- ECB RATE CORRIDOR APPROPRIATE GIVEN ECONOMIC OUTLOOK
- ECB HAS CUT INTEREST RATES MASSIVELY
- CENBANKS CAN RAISE RATES BEFORE NEEDED AS PRECAUTION
- MONETARY POLICY SHOULD BE MORE SYMMETRICAL
- MONETARY POLICY SHOULD INFLUENCE RISK PERCEPTION
- :MONETARY POLICY CAN AID LONG-TERM FINANCIAL STABILITY
- MUST FIND WAY TO COMMUNICATE PRECAUTIONARY RATE HIKES
- CRISIS LIKELY TO WEIGH ON FIN MKTS FOR SOME TIME
- ECONOMY MAY BE VERY SLOWTO RECOVER FROM CRISIS
- ECB WILL COUNTER POTENTIAL PRICE STABILITY RISKS
- ECB TO ABSORB EXTRA LIQUIDITY ONCE ECONOMY IMPROVES
- ECB CAN EASILY EXIT FROM AMPLE LIQUIDITY POLICY
The comments are as expected, however, the unwinding of rate declines are talked about more and more.
US Trade Balance comes in as expected but exports and imports slow. Canada exports slow.
The Trade Deficit comes in at -29.2B from -29.0 expected. Last month it was revised to -28.5 B. Exports fell 2.3%. The Imports fell -1.4%. The real or inflation adjusted deficit moved lower to -39.387 from a revised -39.119. In the 1st quarter the average inflation adjusted deficit was -39 billion which suggests that Trade so far, will have a neglible effect on 2nd quarter GDP growth. This is one piece of the GDP puzzle.
Canada Trade -0.2Billon vs +1.0B expected. This should weaken the CAD$ (USDCAD up). Exports fell the most in 3 months as demand for Canada commodities and industrial goods declined. With the increase in demand for commodities of late, perhaps that will be reduced. However, the Canadian exports rely on US demand and the growth in the US although stable may still suffer as a result of the auto problems. Inventories are still falling at US Wholesalers as inventories continue to be pared from shelves.
US Mortgage Applications fall on the week. Other morning developments to watch.
The refinance index was to blame for all the decline as it fell by -11.8%. The Purchase index meanwhile rose by 1.1%. The average rate on the 30 year mortgage rose to 5.57% from 5.25%. A month ago the rate was 4.76% and a year ago the rate was 6.24%. The higher yields have shut down refinancings. Higher purchases despite the gain in rates is a positive.
Oil is up this morning pushing the commodity currencies up like AUDUSD, NZDUSD, and USDCAD. Later this afternoon, the Reserve Bank of New Zealand has their interest rate meeting . No change is expected but there may be some talk from officials about the high value for the NZ dollar.
The AUDUSD is up on expectation that China Industrial Production to be released tomorrow will be higher than expectations (June 11th 10 PM). The expectation is for Industrial Production to be up 7.7% YoY vs 7.3% in April. Retail Sales from China will also be announced with the expectation of a YoY rate of +15% from +14.8% last month. Austalia benefits from increased growth in China as they are a large exporter of commodities for their expansion.
This morning it was reported that Russia would diversify some of their holdings out of the US dollar. They said they would purchase IMF bonds instead. This has helped lead to the dollar decline this morning. We spoke of this possibility in a prior post as well as the implications for higher rates as a result. Yields are indeed up today.
There is the 10 year treasury auction later today. It will be interesting to see how the auction goes today in light of the Russian comments on their treasury purchases. Treasury 10year yields (and all treasury yields for that matter) have been rising dramatically of late as a combination of currency diversification, crowding out and the idea of a global recovery has led to the sharp upturn. The higher yields threaten any recovery in the housing market/commercial real estate market.
The US Trade Deficit numbers for April will be released at 8:30. The expectation is for a worsening to -29.0 Billion from -27.6B. Watch the Real or inflation adjusted deficit as this is what is used to calculate the GDP effect. The trade values are also influenced by the price of oil which continues to move higher. This has the effect of rising the headline or nominal Trade Balance. The Real Trade Balance may go down if demand is down, however.
Stocks are up strong today around the world.
Bobbys Corner-Open Market-6.10.2009
Good Morning:
World equity markets rose, and US futures are higher as commodity producers led the charge. Oil is trading at a 7 month high-over$71/bar. Metals also rose as the USD fell-thus leaving investors to buy metals as a currency hedge.
The USD declined along with the JPY- as investors look for higher yielding assets. US Treasuries fell-adding 4bps to the yield on the 10 year notes.
Concerns over inflation seem to be creeping into the mindset of the marketplace-we will keep a close on on any news regarding this matter.
Oil:$71.23 Gold;$963.50
Today’s Data:
Trade Balance: exp: -$28.9B prior; -27.6B
Monthly Budget: exp: -$175.0B prior: -$165.9B
HAVE A GREAT DAY & GOOD LUCK
Bank of England’s Barker on the Wires
BoE’s Barker: Seeing some signs of upturn in economy; Rates could stay low for a while
- Very concerned about what will happen beyond this pick-up
- Manufacturing orders starting to come back but it may relate to stocking issue
- Companies’ access to credit are mixed
UK Data Released
UK’s Manufacturing Production came out stronger than expected at 0.2% from the previous -0.1%. No change from -0.1% was forecast.
UK’s Trade Balance missed forecasts at -7.0B from the previous -6.6B. A rise to -6.4% was forecast.
UK’s Industrial Production came out better than expected at 0.3% from the previous -0.6%. A rise to -0.1% was forecast.
ECB’s Mersch on the Wires
ECB’s Mersch: Members were unanimous that current interest rate level of 1.0% id appropriate
- Very low rates have negative side effects
- Current situation stays the same, covered bond plan might be enough
- Against pan-European stress tests for banks
- kenny on EURUSD tests 200 hour MA. Look for support against level
- Greg Michalowski on EURUSD tests 200 hour MA. Look for support against level
- kenny on EURUSD tests 200 hour MA. Look for support against level
- Greg Michalowski on EURUSD tests 200 hour MA. Look for support against level
- kenny on EURUSD tests 200 hour MA. Look for support against level
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