Forex Market Updates & Commentary

• GBPUSD tests channel support
• USDJPY moves higher
• EURUSD stays true to the US range
• Bernanke to assure the markets the Fed has tools
• Belgium Business Confidence fell -7.8 vs -3.5 expectations. Lowest since December 2009
• USDJPY not impressed by the Durables data
• Better US data. EURUSD moves higher
• Durable Goods Improve Over 6% From Prior
• EURUSD found support against the days midpoint
• The NY Morning Forex Commentary is available for viewing
• US Durable Goods Orders Data Due at 8:30AM
• US MBA mortgage applications -2.4% vs. 4.1% prior.
• EUR/USD bullish hourly trendline support, testing 23.6% on hourly
• Kiwi receiving resistance from the 200 hr moving average
• Euro zone industrial new orders (m/m) -0.7%; worse than the 0.6% forecast and 3.6% prior reading.

GBPUSD tests channel support Posted: 24 Aug 2011 08:05 AM PDT The GBPUSD fell below the 200 hour MA and lows from August 19the and 22nd and fell further (see hourly chart above). The price is now down testing the channel trendline at the 1.6385 area. Profit takers came in on the first test.  Will they on the second attempt.  ON the topside, this train to the downside would continue if the price is now able to stay below the 1.6413 level. This level corresponds with the orginal low for the day and is now the 38.2% of the last leg to the downside.

USDJPY moves higher Posted: 24 Aug 2011 07:56 AM PDT The USDJPY has pushed above the 76.62-67 area. This turns the bias back higher for the pair.  76.925, 77.00  and 77.21 are the next upside targets for the pair.

EURUSD stays true to the US range Posted: 24 Aug 2011 06:55 AM PDT The high is defined at the 1.4476 area. The low is defined against the 1.4426 level (50% retracement 200 bar MA in the chart below).  Traders frustrated.  A break will be eyed. Failure will be on the mind of the traders.

Bernanke to assure the markets the Fed has tools Posted: 24 Aug 2011 06:30 AM PDT There is a rumor in the market that a “Think Tank” report is saying that Fed’s Bernanke will look to assure the market that the Fed has the tools to fight a downturn in the US economy. The options that the Fed has include: 1. QE3.  The Fed has tried QE1 and QE 2. When does the tries stop. The last time QE2 one can perhaps argue the excess funds led to speculative buying of commodities, oil and stocks.   This led to slower spending, lower confidence and now lower stocks.  2.  Reinvest maturing proceeds further out the curve.  The Fed is taking the maturing proceeds from the issues they hold on their balance sheet and buying mainly shorter term assets.  The Fed could focus the buying to the longer end of the yield curve which would help to keep mortgage rates low.  The downside is the Fed’s balance sheet has the potential to remain large for a long time and do lower mortgage rates help the home buyer who is upside down on his mortgage.  3. Lower the reserve requirement that banks have to hold.  If the banks have to hold less, they can lend more.  The banks might just buy bonds instead of lending.  This keeps rates low but does it get the economy going? The Fed has some tools but what impact will those tools have on the economy?

Belgium Business Confidence fell -7.8 vs -3.5 expectations. Lowest since December 2009 Posted: 24 Aug 2011 06:01 AM PDT Last month came in at -2.5. This is the lowest level since December 2009. Earlier today the German IFO indices also came out weaker for August.  The EURUSD has rotated off the highs after taking out the days highs by a pip.

USDJPY not impressed by the Durables data Posted: 24 Aug 2011 05:54 AM PDT The better US Durable Goods Orders was met with a yawn in the USDJPY. The price barely moved and remains below the 100 and 200 hour MAs at hte 76.63 and 76.67 levels respectively. Support at the 76.43 level remains.  Overnight Moody’s downgraded the debt of Japan and a 100 billion yen support package failed to weaken the Yen. Now stronger data in the US gets no dollar buying.  Will need a move above the 76.63-67 area to get any attention.

Better US data. EURUSD moves higher Posted: 24 Aug 2011 05:37 AM PDT Durable Goods came in much better than expected (revisions also moved higher). This has led to higher EURUSD on the ironic risk on trade. The EURUSD is approaching the highs of the day at 1.4474.  The high from yesterday extended to 1.4499.  Traders will be eyeing these levels for resistance.  The hourly chart show that the high area today was also a high area from August 15th and August 16th. Each time the price moved to these levels, the price came off.  There have been two attempts to push above with each lasting  a few hours before failing and moving back down. Be on the lookout for failed breaks as well.   These up and down days lend themselves to the false breakout.  Be aware   The data should help the stocks today but it is a long day ahead.

Durable Goods Improve Over 6% From Prior Posted: 24 Aug 2011 05:32 AM PDT Durable Goods Orders:   Survey: 2.0%    Actual: 4.0%    Prior: -2.1%   Revised:  -1.3%   Durables Ex Transportation:   Survey: -0.5%   Actual:  0.7%   Prior: 0.1%   Revised:  0.6% Cap Goods Orders Nondef Ex Air:   Survey:  -1.6%     Actual:  -1.5%    Prior:  -0.4%     Revised: 0.6% Cap Goods Ship Nondef Ex Air:    Actual:  0.2%    Prior:  1.0%  Revised: 1.9%

EURUSD found support against the days midpoint Posted: 24 Aug 2011 05:29 AM PDT The EURUSD fell in early NY trade, but has found profit taking support against the 100 and 200 bar MA on the 5 minute chart and the days midpoint. These levels will be watched as support through the Durable Goods numbers at 8:30 AM ET.

The NY Morning Forex Commentary is available for viewing Posted: 24 Aug 2011 05:05 AM PDT

US Durable Goods Orders Data Due at 8:30AM Posted: 24 Aug 2011 04:41 AM PDT

US MBA mortgage applications -2.4% vs. 4.1% prior. Posted: 24 Aug 2011 04:09 AM PDT

EUR/USD bullish hourly trendline support, testing 23.6% on hourly Posted: 24 Aug 2011 02:49 AM PDT We seen recent buying in the euro following some selling after worse than expected German Ifo and Euro zone industrial new orders readings. Seen on the hourly chart, the pair once against tested upward trendline support and tested the 23.6% on the move from Monday’s low to yesterday’s high. Continued strength in the euro should see us test the 1.4500 handle again, but a turnaround sees us back towards 1.44229. We may not see a chosen direction until the entrance of New York into the market.

Kiwi receiving resistance from the 200 hr moving average Posted: 24 Aug 2011 02:38 AM PDT The NZD/USD has been receiving resistance from the 200 hr moving average for the last 7 hours, and has barely been able to poke its head higher through the line; the 200 hr currently comes in at .82919. Continued resistance should see the pair trade lower, in which case we look to the 50.0% retracement line on the move from Monday’s low to yesterday’s high. In the case of a push higher we look to .8316.

Euro zone industrial new orders (m/m) -0.7%; worse than the 0.6% forecast and 3.6% prior reading. Posted: 24 Aug 2011 02:03 AM PDT